One More Step in the Long Road of Precision Medicine
For any new therapy, diagnostic or device brought forth by our healthcare innovation community, there are three high-level barriers generally encountered on the path to commercialization: Regulatory approval, payment confirmation (generally coverage by public and/or private healthcare payers) and adoption by healthcare providers. For new classes of therapy, such as genetically targeted therapies and their companion diagnostics, there is often a greater challenge to pass regulation, assure coverage and gain adoption since there is little precedent.
As of mid-March, there is new precedent to leverage for gene-based diagnostics and all stakeholders in the development of genomics applications in medicine. Following the November 2017 approval by the FDA of Foundation Medicine‘s FoundationOne CDx, (F1CDxTM), the Centers for Medicare & Medicaid Services (CMS) proposed a National Coverage Determination (NCD) for diagnostic lab tests that include Next Generation Sequencing (NGS). These first steps were the culmination of a great deal of work by industry players, researchers and regulators. On March 16, 2018, CMS announced a finalized NCD for NGS for Medicare patients with advanced cancer (including Stage III, Stage IV, recurrent, relapsed, refractory or metastatic cancers). These are diagnostic tests that, as companions to other diagnostics, identify treatment options based on certain genetic mutations.
As policymakers and payers take on the burden of cost coverage, the progression of the healthcare sub-industries focused on leveraging patient’s genetic and other “-omic data” will benefit from the step toward better coverage.
The burden of payment for genetic sequencing was a topic of discussion at HIMSS18 among players in the space of gene-based therapy (HIT, providers, etc.). Prior to the CMS coverage decision, patients often had only the option to pay out of pocket for genetic sequencing. Based on this NCD, Medicare patients with advanced cancer have coverage. That coverage will be limited to FDA approved diagnostics, such as F1CDxTM, but the test results may be used both to match patients with FDA-approved gene based therapies and to identify patient candidacy for clinical trials of therapies not yet approved by the FDA. This potentially charts a clearer, more predictable path for additional NGS diagnostics in development, not only because of payment and regulatory precedent, but importantly because of the potential to speed up clinical trials for gene based therapies if candidates are identified more quickly.
Patients diagnosed with cancer, or really any life-threatening condition, want and deserve access to the latest proven advancements in medicine. This NCD marks a big step in patient access and for development of targeted therapies and companion diagnostics. It also brings stakeholders attention to the looming challenge of payment at a systemic level. This remains a primary focus of the discussion among payers and policy makers.
CMS Administrator Seema Verma and other high-ranking Government officials have discussed their intentions to curb costs for Medicare and Medicaid specifically related to novel genetically targeted therapies because they come at notably high cost. Therapies of this type can be priced between $300,000 and $500,000, with some reaching as high as $1 million. CMS does not negotiate prices, so its efforts to reduce the cost burden are focused on alterations to the format of payment for state agencies and managed care organizations who do. Some concepts floated by officials include paying less for a given drug based on the target indication used with a patient, or paying for high-cost drugs over a longer period of time. The CMS final NCD for genetic sequencing diagnostics only further brings this cost challenge to the forefront.
As policymakers and payers take on the burden of cost coverage, the progression of the healthcare sub-industries focused on leveraging patient’s genetic and other “-omic data” will benefit from the step toward better coverage. However slow and bumpy the progress may seem, expect to see continued or accelerated investment in diagnostics and therapy by both public research sources as well as private equity.
As these areas of investment continue, HIT vendors will have an opportunity to differentiate. Cancer in particular offers a slightly more carved out business channel for vendors to target with specialized solutions and a big market to warrant the investment. Cancer patients often have large care teams to manage, often have greater needs to make contact with the care team or show up for therapy and have a lot of test results to manage. EHR systems, telehealth companies, care management, risk based business models and other subsets of HIT all have an opportunity for differentiation within this specialized care community.
Vendors such as Flatiron, recently acquired by Roche for $1.9 Billion, Syapse, 2bPrecise, Orion Health and others have taken early focused steps both with respect to “Precision Medicine” and to advancements in oncology care (as the CMS NCD specifically pertains to). Healthcare IT vendors, with this NCD, have yet another signal to consider the role of genomic and other comparable complex data types in their systems.
Here are a few specific applications to keep an eye on related to this evolution:
As NGS data becomes more readily available and expected as a component of care, analysis and facilitating utility of these complex forms of data will be an opportunity for competitive advantage.
Matt Guldin · 1 year ago
John Moore lll · 2 months ago
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CMS Drops MACRA Rules – 5 Things to Know About MIPS
Big news this week when on Wednesday CMS dropped the draft rules for MACRA, all 962 pages worth. These rules are the outcome of legislation that passed a couple of years back to replace the flawed SGR reimbursement model for physicians and hospitals. In its place, CMS is proposing two dominant reimbursement models:
In the conference call on Wednesday, acting head of CMS, Andy Slavitt, made it clear that the intent of MACRA is to move towards a model that provides flexibility for physicians to deliver quality care and enable the free flow of information across the sector in support of patient care and more broadly population health.
Plenty to talk about regarding both APM and MIPS, but for brevity’s sake, let’s focus on MIPS and we’ll do a follow-up post on APM in near future.
Five Things to Know About MIPS
Unpacking 962 pages of proposed rules in not for the feint of heart. No, we have not gone over every little nuance of the rules but in our cursory review we have identified five key points that really are the crux of the rules for EPs as it pertains to MIPS. These are the things that define the intent of MIPS and also where we are likely to see some push-back, after all, these rules are not quite set in stone – yet.
1) Quality and information exchange are top priorities. MIPS reimbursement will be based on a composite score of four key components: quality, resource use, clinical practice improvement activity, and advancing care information. Quality and advancing care information will be 75% of total weighting. Thus, it is quite clear where CMS wants physicians to focus in the near term – improving quality of care delivered and accelerating the use of IT to facilitate the flow of PHI in support of care quality.
2) Move from highly prescriptive to more flexible model. Under MIPS, MU is effectively dead for EPs under Medicare – the odd twist though is that MU is still in place for hospitals and Medicaid EPs, though CMS has expressed its intent to modify these areas as well in the future. CMS is giving quite a bit of flexibility to EPs in reporting out what measures are most important and relevant to their practice. Gone are the prescriptive, strictly defined measures that were part and parcel of MU, measures that often did not align with other CMS programs.
3) Be careful what you wish for – flexibility may breed complexity. While physicians now have a range of options as to what they will report out on as part of MIPS, this flexibility has a way of compounding itself in a nearly exponential way. Eligible physicians will need to wade through the many permutations of MACRA reporting requirements to settle upon what is best for their practice. This will create a lucrative opportunity for consultants serving this market. We also wonder how CMS will keep track of all of this as well – this is a non-trivial issue.
4) No time to waste – one year reporting period, begins January 1, 2017. Due to legislative requirements, CMS’s hands are tied as to when the switch to MACRA begins – but Jan. 1 2017 is only a short six months or so away from when rules will be finalized. What CMS does have flexibility on is the reporting period and they have chosen to go with one year, versus the more popular 90-day reporting period. CMS will get some heavy pushback here and likely acquiesce to 90-day. Would also not be at all surprised if the whole program gets push back a full year – just remember what happened to switch from ICD-9 to ICD-10.
5) Trust then verify is the mantra. Under MACRA’s new reporting requirements CMS recognizes that it will need to trust EPs to do the right thing. That being said, the proposed rules also have a significant amount of language pertaining to surveillance. How that surveillance will occur, how much will big brother be looking over a physician’s shoulder is up for interpretation,
While there are aspects to MACRA that have cause for concern, as outlined above, we are quite impressed with what CMS has put together. Clearly, a lot of hard work has gone into these proposed rules. CMS has reconciled many of the past ills – from the defunct SGR reimbursement model, to the oft-maligned MU program – with the desire to align the program to how physicians actually practice care that will lead to improvement in quality of care provided and value for the U.S. citizen. This is a Herculean task and for that CMS, Andy Slavitt, Karen DeSalvo, and countless others that have contributed to this effort deserve applause.
Some Additional Resources:
HHS Secretary Burwell’s take, with a pretty slick video giving high level overview of MACRA
The proposed rules, all 962 pages
Nice, digestable summary of MACRA
Similar to previous, but takes closer look at Advancing Care Information – the replacement to MU
Politico’s, Dan Diamond’s, interview/podcast with Andy Slavitt about MACRA