The Health Policy War Room

The FDA recently granted authorization for the first multi-gene test for assessing hereditary cancer risk, marking a significant advancement in genetic screening capabilities. Developed by Invitae Corporation, the Invitae Common Hereditary Cancers Panel analyzes variants in 47 genes associated with increased cancer risk. Using next-generation sequencing on DNA from blood samples, the test looks at BRCA1 and BRCA2 variants linked to breast and ovarian cancer, as well as other cancer-related genes.  (image source: Adobe Stock Images) The FDA’s approval provides a regulatory framework giving labs a clearer roadmap for developing similar multi-gene panels. With an authorized model in place, labs can proceed more confidently in navigating FDA submissions. Specifically, the de novo classification created for Invitae’s test allows future lab-developed panels to gain regulatory clearance through the expedited 510(k) pathway by demonstrating substantial equivalence. This streamlined validat...

The Medicare Physician Fee Schedule (MPFS) Conversion Factor has played a significant role in shaping the reimbursement rates for healthcare services provided by physicians under the Medicare program in the United States. The conversion factor is a crucial component of the MPFS, determining the dollar value assigned to the relative value units (RVUs) assigned to each medical service. This factor has undergone several changes over the years in response to evolving healthcare policies and financial considerations. The history of the conversion factor dates back to the implementation of the Resource-Based Relative Value Scale (RBRVS) in 1992. The RBRVS system aimed to standardize physician payments based on the complexity and resource utilization of services provided. Over time, the conversion factor has seen several adjustments such as the creation (and elimination) of the sustainable growth rate formula and the more recent shift to quality payment programs and accountable care. Under cu...

Medicare is an important aspect of the healthcare system in the United States and plays a crucial role in providing medical coverage to millions of seniors. In recent years, Medicare spending and financing has been a topic of great concern and debate, with many questioning the sustainability of the program. In this article the Kaiser Family Foundation takes a look at some trends in Medicare spending and financing and what policy solutions might address these concerns. In 2020, Medicare spending accounted for 3.7% of the Gross Domestic Product (GDP), and this number is expected to grow in the future. KFF projects that Medicare spending will reach 5.8% of GDP by 2040. The main drivers of this spending growth are the increasing number of beneficiaries, rising healthcare costs, and the increasing costs of new medical technologies. This trend highlights the need for finding solutions to reduce the growth of healthcare costs and improve the efficiency of the healthcare delivery system. With...

On August 2, 2021, CMS placed on display at the Federal Register the final fiscal year 2022 Inpatient Prospective Payment System Final rule. Amongst the over 2,000 pages are CMS's final decisions on New Technology Add-on Payments (NTAP) for FY 2022. The NTAP program was designed to identify new technologies and to ensure that payment under the IPPS would be adequate so that early adopters of  new technologies would not be financially disadvantaged. Under the traditional NTAP pathway, a technology must be considered "new",  the charges of cases involving the technology must be more than 75 percent of the unadjusted rate for the MS-DRG to which the technology is assigned, and the technology must represent a substantial clinical improvement over existing technologies.  Beginning in 2021, CMS implemented an alternative NTAP pathway for technologies granted "break-through" approval by the FDA and for certain antimicrobial products. For this alternative pathway, techn...

On June 22, Senator Ron Wyden (D-Ore.), Chairman of the Senate Finance Committee released his own set of “principles” for lowering prescription drug prices. Characterized as a step toward “comprehensive legislation” on the matter, the principles are said to guide Wyden’s work during the summer months with the ultimate goal of delivering relief from high prescription drug prices. Wyden’s principles largely reflect the concepts that have been widely circulated as parts of many prior statements on reducing drug prices. Medicare negotiation, limiting out-of-pocket costs at the pharmacy counter, controlling price increases for older drugs, and rewarding innovation are concepts that have been debated at length in the past. Wyden also suggests that any drug pricing proposals should apply to all Americans – not just those covered by Medicare. Acknowledging the work already done by the Senate Finance Committee, Wyden’s goal is to develop a legislative package, with bipartisan support, that can ...

Legislators and policymakers alike have struggled with finding effective ways to reconcile the differences between drug prices in the United States and prices for those same drugs in foreign countries. Many factors including Government price controls, varied supply chains, and differences in the volume and mix of drugs prohibit the direct comparison of drug prices between countries. The concept of developing a price index to track differences in prices over time and across markets is not new. The Medicare program has used market basket updates – a form of price indexing, to keep growth in payments under its prospective payment systems from falling behind prices in the market.  However, the concept of a price index for drugs has not been widely recognized by policy makers. That was, until President Trump released his “American Patients First” (1) blueprint to lower drug costs . In the blueprint, President Trump urged the Department of Health and Human Services to take steps to “addr...

Earlier this week, I blogged about the FDA's new Digital Health Center of Excellence, the virtual group responsible for all things regulatory in nature affecting digital health. As a part of their remarks to begin the first of two listening sessions, the FDA provided a list of thirteen areas on which the DHCoE will focus. Included among these were "Software as a Medical Device" and "Software in a Medical Device". I wanted to dive a bit deeper into what appears on the surface to be a small difference but in reality has a mighty impact -- at least it does today.  Software as a Medical Device   In 2013, as a part of their final document titled " Software as a Medical Device (SaMD): Key Definitions " the International Medical Device Regulators Forum (IMDRF) released its definition of "Software as a Medical Device" (SaMD):  The term “Software as a Medical Device” (SaMD) is defined as software intended to be used for one or more medical purposes th...

In this week's Healthcare HotShots, I get in the wayback machine and revisit May 2018 to look at President Trump's American Patients First blueprint to see if I can figure out what a second Trump Administration might do to lower prescription drug costs.

After reading Dr. Adam Fein's blog about growth in the biosimilar market (here:https://www.drugchannels.net/2020/10/the-booming-biosimilar-market-of-2020.html) I decided to take my own look at Medicare payments for biologicals and their biosimilar competitors to see if there have been any recognizable changes. Read on to see what I found.... Biologicals are products that include blood, tissues, recombinant proteins and others that are developed using natural sources. Unlike small molecule drugs, which are chemically synthesized and have well known and understood chemical structures, biologics are exceptionally complex and can be complicated to manufacture. Because of their nature, biologics are highly susceptible to production variations -- making them difficult to replicate. This manufacturing sensitivity is what makes it virtually impossible for manufacturers to develop an exact replica, or a “generic” biologic. This is part of what led to the development of biosimilars. Biosimil...

Automated multichannel chemistry (AMCC) tests are a subset of diagnostic tests that are focused on overall well-being. Testing analytes like glucose, cholesterol, potassium, trigylcerides and others is part of almost every doctor's visit. The 23 tests that are generally identified as AMCC tests are relatively simple in nature using basic testing methods and the simple nature of these tests is reflected in the amounts that Medicare pays for these tests. The average Medicare Clinical Laboratory Fee Schedule (CLFS) payment rates for these tests is just over $6.50 per test. Despite the low per-test payment rate, AMCCs are big business, accounting for $194 million in Medicare spending in 2018. Read on for more...  There has been alot said about Medicare payment for AMCC tests since the Protecting Access to Medicare Act (PAMA) reformed the CLFS. Part of the way PAMA was implemented required Medicare to set payment rates and make payments for individual tests as described by their bil...

Photo by Syed F Hashemi on Unsplash Welcome the the Health Policy WARroom, the official blog of Gettysburg Healthcare Consultants. GHC, located in Hanover, Pennsylvania works with health industry clients to obtain appropriate coverage, coding and reimbursement from the federal Medicare program. John Warren is the owner and principal consultant at GHC. He has been in the health insurance industry for nearly 30 years. He spent 22 years at the Centers for Medicare & Medicaid Services and directed the Divisions that developed payment policy and rate setting for the Medicare physician fee schedule, clinical laboratory fee schedule, ambulance fee schedule and the Part B Average Sales Price programs. He has consulted with a wide range of clients in the healthcare sector including pharmaceutical companies, laboratory test developers, medical equipment suppliers, and physician specialty societies. John uses his comprehensive understanding of the Medicare program to navigate the complex and...