LymPro White Paper - Reimbursement & use of MAC
8. Reimbursement Strategy
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8.1 United States
There are three main components to reimbursement for diagnostics in the US: (i) coverage, (ii) coding, and (iii) pricing and payment.
8.1.1 Coverage
For payers, the decision whether or not to pay for (cover) a particular diagnostic product is generally driven by evaluation of the clinical evidence supporting the clinical utility of the test. That is the degree to which patient health outcomes are improved with the use of the test, and more importantly for the payers, evidence to support the net economic benefits provided by the improved outcomes. A recent exception is in the case of a companion diagnostic, one that is required for the safe and effective use of a particular therapeutic product; private payers have accepted inclusion of language to that effect in the drug label in lieu of the standard clinical utility data package. (It should be noted however that most of the patients likely to be tested with the LymPro test will be under the jurisdiction of Medicare (the older than 65 years population). Medicare’s coverage policies in particular tend to be more population based rather than individual benefit in their evidentiary review.
It is likely that the LymPro test will be ready for launch in a CLIA lab setting prior to the approval as a companion diagnostic of a companion therapeutic product. This means that Amarantus will likely need to undertake the studies necessary to provide the “reasonable and necessary” clinical evidence to support positive decisions by the payers, in particular Medicare.
These studies need to:
> Validate the test in terms of its analytical performance (sensitivity, specificity and reproducibility, limits of detection etc) across a range of patients who would meet the inclusion criteria for the test
> Confirm the diagnostic accuracy (or clinical validity) of the LymPro test with Alzheimer’s disease or other pre-specified Intended Use populations
> Document the clinical utility (i.e. reduction in costs or improvements in medical outcomes as a result of receiving additional information from the test)
> Provide evidence of the health economic impact of those clinical outcomes
> In addition many payers are now requesting evidence that physicians are changing their clinical interventions on the basis of the test results.
The good news about launching the test via a CLIA lab model is that despite the individual origins of the patient samples, all the billing will be conducted through a single Medicare Administrative Contractor or MAC . The medical director at the MAC wields significant power in the decision about whether or not to “cover” a test. Finding a knowledgeable medical director that is willing and able to review the evidence dossier is key, and consequently locating the CLIA lab in a jurisdiction with a diagnostically savvy medical director is prudent.
The good news is that by virtue of a “local coverage decision” by the regional MAC, a de facto “national coverage decision” for Medicare patients is obtained. Key influences on payers are peer reviewed papers that cover analytical performance (analytical validity), clinical performance (clinical validity) and clinical utility. Positive technology assessment reports provided by various groups such as the Blue Cross Blue Shield Association Technology Evaluation Center (TEC) and ICER at the Massachusetts General Hospital’s Institute for Technology Assessment are also exceedingly helpful. These reports provide a rigorous assessment of the clinical evidence and assess whether or not the technology improves outcomes such as, quality of life and ability to function. These Technology Assessment groups do not evaluate costs. The criteria that these groups use to review and assess published trial results are well documented and will be a key input to designing our clinical trial plans.
It will also be important to generate and publish data from the Clinical Utility studies that assess the health economic impact of the changes in outcomes resulting from use of the LymPro test. Modeling the data to reflect the characteristics of the individual health plan will be an important component for approaching and educating the medical directors of the payer plans that influence or directly write policies for coverage.
Prior to the availability of these data, Amarantus can generate theoretical models based upon current testing paradigms and previously published literature reflecting patient/physician behavior. These models in combination with published performance data can be used to educate and contract with select private payers (especially single payer systems like Kaiser, Geisinger), hopefully generating favorable coverage policies on a plan-by-plan basis.
It should be noted that in the absence of a disease modifying therapy, generating positive health economic outcomes, clinical outcomes evidence for the LymPro test as “an aid to diagnosis of dementia of the Alzheimer’s type” will be challenging. However, the Company should also evaluate cost reduction scenarios which may include the potential of a positive LymPro test result to shorten the “diagnostic odyssey.”
8.1.2 Coding
Amarantus intends to pursue the issuance of a Current Procedural Terminology (or CPT) procedure code specifically for the LymPro Test. The strategy will be to initially use a miscellaneous code and negotiate directly with payers for payment of submitted claims until a specific code is issued. This process generally takes 12-18 months through the AMA and would likely result in a temporary (assuming Amarantus could show reasonable utilization data) CPT code. In this case there is no obvious “under the radar strategy” since none of the existing flow cytometry codes will match the ICD9/10 Diagnostic codes for dementia of the Alzheimer type (331.0). In any case the LymPro Test is sufficiently different from existing CPT flow codes that matching the vignette would also be a stretch. Eventually with more clinical evidence, a national or permanent Tier 1 code could be established.
Figure 12. Process for healthcare reimbursement.
8.1.3 Pricing & Payment
Pricing levels will initially be negotiated directly with the payers based upon a dossier of information, that may include the following: i) cost analysis of resources required to perform the test (both fixed and variable); ii) amortization of the R&D investment to develop the test; iii) payment amounts determined by other payers; iv) a health economic model reflecting the performance of the LymPro test; v) charges, payment amounts and resources required for tests that may be comparable (crosswalk to other flow cytometry type test) or otherwise relevant (i.e. gap fill to an imaging tests such as Avid Radiopharmaceutical’s (now Lilly’s) Amyvid with an estimated $3,000-$5,000 per procedure in the US); and vi) projected test volume and utilization data. Because private payers often use Medicare as a benchmark when developing their own payment policies the outcome of the Medicare rate setting process could influence the payment rate set by other payers, consequently it is important to have a comprehensive strategy in place for commercialization of the test prior to engaging with the payers. Looking forward, it is anticipated that in the U.S. the emergence of a greater number of Managed Care & Accountable Care organizations will drive Rx/Dx combination pricing discussions.
8. Reimbursement Strategy
http://webcache.googleusercontent.com/search?...&gl=us
8.1 United States
There are three main components to reimbursement for diagnostics in the US: (i) coverage, (ii) coding, and (iii) pricing and payment.
8.1.1 Coverage
For payers, the decision whether or not to pay for (cover) a particular diagnostic product is generally driven by evaluation of the clinical evidence supporting the clinical utility of the test. That is the degree to which patient health outcomes are improved with the use of the test, and more importantly for the payers, evidence to support the net economic benefits provided by the improved outcomes. A recent exception is in the case of a companion diagnostic, one that is required for the safe and effective use of a particular therapeutic product; private payers have accepted inclusion of language to that effect in the drug label in lieu of the standard clinical utility data package. (It should be noted however that most of the patients likely to be tested with the LymPro test will be under the jurisdiction of Medicare (the older than 65 years population). Medicare’s coverage policies in particular tend to be more population based rather than individual benefit in their evidentiary review.
It is likely that the LymPro test will be ready for launch in a CLIA lab setting prior to the approval as a companion diagnostic of a companion therapeutic product. This means that Amarantus will likely need to undertake the studies necessary to provide the “reasonable and necessary” clinical evidence to support positive decisions by the payers, in particular Medicare.
These studies need to:
> Validate the test in terms of its analytical performance (sensitivity, specificity and reproducibility, limits of detection etc) across a range of patients who would meet the inclusion criteria for the test
> Confirm the diagnostic accuracy (or clinical validity) of the LymPro test with Alzheimer’s disease or other pre-specified Intended Use populations
> Document the clinical utility (i.e. reduction in costs or improvements in medical outcomes as a result of receiving additional information from the test)
> Provide evidence of the health economic impact of those clinical outcomes
> In addition many payers are now requesting evidence that physicians are changing their clinical interventions on the basis of the test results.
The good news about launching the test via a CLIA lab model is that despite the individual origins of the patient samples, all the billing will be conducted through a single Medicare Administrative Contractor or MAC . The medical director at the MAC wields significant power in the decision about whether or not to “cover” a test. Finding a knowledgeable medical director that is willing and able to review the evidence dossier is key, and consequently locating the CLIA lab in a jurisdiction with a diagnostically savvy medical director is prudent.
The good news is that by virtue of a “local coverage decision” by the regional MAC, a de facto “national coverage decision” for Medicare patients is obtained. Key influences on payers are peer reviewed papers that cover analytical performance (analytical validity), clinical performance (clinical validity) and clinical utility. Positive technology assessment reports provided by various groups such as the Blue Cross Blue Shield Association Technology Evaluation Center (TEC) and ICER at the Massachusetts General Hospital’s Institute for Technology Assessment are also exceedingly helpful. These reports provide a rigorous assessment of the clinical evidence and assess whether or not the technology improves outcomes such as, quality of life and ability to function. These Technology Assessment groups do not evaluate costs. The criteria that these groups use to review and assess published trial results are well documented and will be a key input to designing our clinical trial plans.
It will also be important to generate and publish data from the Clinical Utility studies that assess the health economic impact of the changes in outcomes resulting from use of the LymPro test. Modeling the data to reflect the characteristics of the individual health plan will be an important component for approaching and educating the medical directors of the payer plans that influence or directly write policies for coverage.
Prior to the availability of these data, Amarantus can generate theoretical models based upon current testing paradigms and previously published literature reflecting patient/physician behavior. These models in combination with published performance data can be used to educate and contract with select private payers (especially single payer systems like Kaiser, Geisinger), hopefully generating favorable coverage policies on a plan-by-plan basis.
It should be noted that in the absence of a disease modifying therapy, generating positive health economic outcomes, clinical outcomes evidence for the LymPro test as “an aid to diagnosis of dementia of the Alzheimer’s type” will be challenging. However, the Company should also evaluate cost reduction scenarios which may include the potential of a positive LymPro test result to shorten the “diagnostic odyssey.”
8.1.2 Coding
Amarantus intends to pursue the issuance of a Current Procedural Terminology (or CPT) procedure code specifically for the LymPro Test. The strategy will be to initially use a miscellaneous code and negotiate directly with payers for payment of submitted claims until a specific code is issued. This process generally takes 12-18 months through the AMA and would likely result in a temporary (assuming Amarantus could show reasonable utilization data) CPT code. In this case there is no obvious “under the radar strategy” since none of the existing flow cytometry codes will match the ICD9/10 Diagnostic codes for dementia of the Alzheimer type (331.0). In any case the LymPro Test is sufficiently different from existing CPT flow codes that matching the vignette would also be a stretch. Eventually with more clinical evidence, a national or permanent Tier 1 code could be established.
Figure 12. Process for healthcare reimbursement.
8.1.3 Pricing & Payment
Pricing levels will initially be negotiated directly with the payers based upon a dossier of information, that may include the following: i) cost analysis of resources required to perform the test (both fixed and variable); ii) amortization of the R&D investment to develop the test; iii) payment amounts determined by other payers; iv) a health economic model reflecting the performance of the LymPro test; v) charges, payment amounts and resources required for tests that may be comparable (crosswalk to other flow cytometry type test) or otherwise relevant (i.e. gap fill to an imaging tests such as Avid Radiopharmaceutical’s (now Lilly’s) Amyvid with an estimated $3,000-$5,000 per procedure in the US); and vi) projected test volume and utilization data. Because private payers often use Medicare as a benchmark when developing their own payment policies the outcome of the Medicare rate setting process could influence the payment rate set by other payers, consequently it is important to have a comprehensive strategy in place for commercialization of the test prior to engaging with the payers. Looking forward, it is anticipated that in the U.S. the emergence of a greater number of Managed Care & Accountable Care organizations will drive Rx/Dx combination pricing discussions.
