Emerging Tests: Medicare to Cover Next Gen-Sequencing Tests for Advanced Cancer

In the PAMA era, there are two salient trends in Medicare Part B lab reimbursements:

• Sharply lower prices for traditional tests; and
• Wider coverage of newly emerging tests, including some that the FDA has not yet approved.

The second trend continued on March 16, when CMS finalized its draft National Coverage determination (NCD) expanding Medicare coverage of next-generation sequencing (NGS) cancer panels.

Coverage of Non-Approved NGS Cancer Tests
The NCD covers certain NGS tests for certain cancer patients for use in limited situations. Let’s go through the basic coverage requirements one by one.

1. Patient Must Have “Advanced Cancer”
Under the NCD, NGS tests are approved only for patients with “advanced cancer,” i.e., cancer that is:

2. Two Approved Uses
The NCD approves NGS testing for advanced cancer for only two kinds of uses:

• As a companion diagnostic “to identify patients with certain genetic mutations that may benefit from” FDA-approved treatments. “These tests can assist patients and their oncologists in making more informed treatment decisions,” the NCD explains; and/or
• To determine a patient’s eligibility for cancer clinical trials when the patient doesn’t have a cancer mutation that matches to an NGS treatment.

3. Tests Must Qualify
The third condition relates to the NGS test itself. Under the NCD, tests currently or subsequently approved or cleared by the FDA as an in vitro cancer companion diagnostic are fully covered (provided, of course, that the other NCD conditions are met). Currently available tests with the requisite FDA approval include two assays from Foundation Medicine (whose stock price increased 3% after the NCD was published):

The NCD also expands automatic coverage for FDA-approved tests for repeat testing when a patient has a new primary diagnosis. In addition, tests that have not been FDA cleared or approved may be covered if the local Medicare Administrative Contractor decides to cover them.