Medicare’s final 2014 pricing rates for more than 100 new CPT codes for molecular pathology procedures is notable for two things: the apparent lack of any reconsideration of pricing released in September and the final pricing for Myriad Genetics’ BRCA test, which is half of what it had been paid previously. Despite receiving numerous reconsideration requests after publishing rates Sept. 30, 2013, the Centers for Medicare and Medicaid Services (CMS) did not make additional adjustments and in fact did not publicly respond to any of the requests. Given that the agency typically goes to great lengths to explain decisions made in the physician fee schedule rule, the lack of discussion or even acknowledgement of reconsideration requests is surprising. The final MoPath pricing rates contained in the 2014 final Clinical Laboratory Fee Schedule (CLFS) do reflect the negative 0.75 percent negative update applied to the entire fee schedule. It’s unclear whether the 2 percent reduction from sequestration will also apply. The final MoPath prices are about 26 percent higher than the proposed rates released in May 2013 (NIR, Oct. 10, 2013, p. 1). However, CMS released final prices for only 65 of the new codes, leaving coverage and pricing for the […]
Medicare’s final 2014 pricing rates for more than 100 new CPT codes for molecular pathology procedures is notable for two things: the apparent lack of any reconsideration of pricing released in September and the final pricing for Myriad Genetics’ BRCA test, which is half of what it had been paid previously.
Despite receiving numerous reconsideration requests after publishing rates Sept. 30, 2013, the Centers for Medicare and Medicaid Services (CMS) did not make additional adjustments and in fact did not publicly respond to any of the requests. Given that the agency typically goes to great lengths to explain decisions made in the physician fee schedule rule, the lack of discussion or even acknowledgement of reconsideration requests is surprising.
The final MoPath pricing rates contained in the 2014 final Clinical Laboratory Fee Schedule (CLFS) do reflect the negative 0.75 percent negative update applied to the entire fee schedule. It’s unclear whether the 2 percent reduction from sequestration will also apply.
The final MoPath prices are about 26 percent higher than the proposed rates released in May 2013 (NIR, Oct. 10, 2013, p. 1). However, CMS released final prices for only 65 of the new codes, leaving coverage and pricing for the remaining codes up in the air. Many of the new codes are not being paid by Medicare at all, based on noncoverage decisions issued by Medicare administrative contractors (MAC).
Myriad BRCA Pricing
Final pricing for Myriad’s BRCA1/2 test (CPT 81211) remains a source of confusion. When final rates were released Sept. 30, Noridian, the Medicare contractor that processes Myriad’s BRCA claims, set the price at $1,449.01 while the national limit was set at $2,795.09. However, Noridian later indicated that its price was a clerical error and that the pricing was unchanged from the interim price of $2,795.
But the final pricing released by CMS in November shows a rate of $1,438.14 for the BRCA1/2 test (the same payment as for a BRCA1 test). Some industry analysts continue to believe the rate is still a mistake and that CMS will adjust payment upward. However, the fact that CMS has not addressed this issue since releasing the final CLFS could indicate that the final rate was no mistake.
Amanda Murphy, an analyst with William Blair & Co., says she continues to view this as a binary situation. “We still believe it is possible, and probably more likely, that the final rate of $2,795 established through MAC gap-fill will ultimately be the rate; however, we assigned a lower probability to that scenario than earlier in the week (i.e., if we were assigned a 80 percent likelihood to positive resolution, it is 60 percent now),” she wrote in a Dec. 6 research note.
A Myriad spokesman tells National Intelligence Report that the company is in discussions with CMS to resolve the issue and that company officials continue to believe the $1,438 price is an error.
Further compounding the issue is the fact that a number of other lab companies now are offering BRCA testing at a lower price point than Myriad. Until June of this year, Myriad held the monopoly on BRCA testing, but a Supreme Court ruling that naturally occurring human genes cannot be patented opened the door for other companies to offer competing tests.
Just hours after the Supreme Court ruling, Ambry Genetics launched a BRCAPlus test for $2,280 and Gene by Gene began offering BRCA testing for $995. Since then, many other companies have launched BRCA tests at a much lower price point than what Myriad had been charging (more than $3,000). Quest announced in October that it would offer a BRCAvantage test, and LabCorp jumped into the fray Dec. 2 with its BRCAssure test.
Myriad is engaged in a number of lawsuits with competitors over BRCA testing, the latest involving Invitae Corp., which said Nov. 19 that it would begin offering genetic testing services for BRCA1 and BRCA2.
BRCA1 and BRCA2 gene mutations account for 20 percent to 25 percent of heriditary breast and ovarian cancers, and testing for them has represented 75 percent of Myriad’s sales.
Myriad stock price currently is well off its 52-week high of $38.27. As of Dec. 11, the stock was trading at around $24.
