BILLINGS, ANDREWS and ADDARIO: Penny-wise, pound-foolish medicine

December 17, 2013 Categories: All News, ACLA In The News

Detecting cancer and other serious diseases just got harder, thanks to a shortsighted decision from federal officials.

At issue are government payment rates for molecular diagnostic tests — essentially, analyses of changes in a person’s genetic code and how those changes affect the individual’s disease.

Earlier this year, the Centers for Medicare and Medicaid Services proposed severely reducing the amount that the government would pay for such tests. Then earlier this month, the agency announced that it would not revise its reimbursement policy for 2014 — thereby building on its previous cuts.

By failing to pay adequately for these diagnostics, officials are putting lives at risk and raising health costs in the process. They must change their tune — and ensure that reimbursement rates are sufficient for all Americans to have comprehensive access to these tests.

Molecular diagnostics represent among the most promising developments in medicine. In fact, they can help patients suffering from an illness receive more targeted, individualized and effective care. Molecular diagnostics have been particularly powerful in the fight against cancer, which kills almost 1,600 Americans every day.

Consider lung cancer. Scientists at Arthur G. James Cancer Hospital’s Ohio State Comprehensive Cancer Center and at the Richard J. Solove Research Institute have found that by analyzing more than 50 genes in a lung cancer patient’s tumor biopsy, they can tailor a patient’s treatment based on mutations in those genes.

For example, if a mutation is found in the epidermal growth factor receptor gene, the medications erlotinib or afatinib can be prescribed. These drugs have a 75 percent response rate. Standard chemotherapy, on the other hand, would have a 25 percent to 30 percent response rate to this particular patient’s cancer.

Genetic testing has revolutionized not just the quality of care, but its cost, too. The logic is simple — better, faster diagnostics yield more precise, timely and less wasteful care. That saves money.

Every year, between 20 percent and 75 percent of patients do not respond adequately to the medication they have been prescribed. That high failure rate drives up health care costs. The president of the American Clinical Laboratory Association has estimated that the nation’s health care system could save $110 billion each year if genetic tests were used to individualize prescriptions for patients.

Employing genetic testing to steer colorectal-cancer patients onto appropriate drugs could save more than $600 million annually. The Journal of the American Medical Association has reported that such testing could help predict the effectiveness of specific chemotherapy treatments for breast-cancer patients — and yield $400 million in savings in the process.

Yet federal officials have not brought their payment policies in line with this new science. In order to bring more clarity to the billing process, the Centers for Medicare and Medicaid Services has moved away from having labs bill for every step of a test separately and instead, assigned new, test-specific codes. Unfortunately, the Centers chose a pricing method for these new codes that allowed local Medicare contractors to slash the rates they will pay for molecular diagnostics by as much as 80 percent.

The Centers for Medicare and Medicaid Services‘ decision affects all Americans — not just those on Medicare or Medicaid. Many insurance companies base their reimbursement policies on those of the agency. With payment rates plummeting, some laboratories may no longer be able to afford to run these critical tests. While these tests have typically been billed at $1,200 to $3,500, margins aren’t very high. Consequently, genetic testing could end up being available only through elite academic institutions — not through community hospitals, where the vast majority of patients are diagnosed and treated.

Dr. Paul R. Billings is the chief medical officer of California-based Life Technologies, where Ronnie Andrews serves as president of genetic and medical sciences. Bonnie J. Addario is chairman and founder of the Bonnie J. Addario Lung Cancer Foundation and Addario Lung Cancer Medical Institute.

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