December 13, The Future Reimbursement Environment for NGS for Oncology

Transcription

1 WELCOME!

2 Today s Speaker Mr. Mathews has worked on a variety of diagnostic reimbursement projects involving the analysis, development, and implementation of coding, coverage, and payment strategies for both emerging and established innovators. This includes involvement in the commercialization of over 100+ different test products in the cancer, diabetes, cardiovascular disease, and infectious disease spaces. These tests range from simple point of care technologies to esoteric molecular approaches involving drug diagnostic combinations. He has knowledge gained by working not only with IVD platform and kit developers but also sole-source laboratories that are pursing value-based pricing. He also has specific knowledge and expertise in development of global market access plans for companion diagnostics. Mr. Mathews prior experience includes several years of working on health policy issues as a legislative aide on Capitol Hill. He also worked for the government affairs office of a biotechnology company and has worked on a National Institutes of Health sponsored clinical trial focused on genetic testing for Alzheimer s disease. Mr. Mathews completed his undergraduate work at Colgate University and received a Masters Degree in Public Policy at Duke University.

3 Today s Speaker

4 December 13, 2016 The Future Reimbursement Environment for NGS for Oncology

5 Disclosures and Disclaimers I am reimbursement consultant and will not be speaking to regulatory issues I am not an employee of Illumina and cannot speak to specific products The opinions expressed during this presentation are my own and do not represent the opinions of Illumina. Any uses of Illumina s products described in this presentation may be uses that have not been cleared or approved by the FDA or any other applicable regulatory body. Illumina is compensating me to speak at this event Boston Healthcare Associates, Inc. 5

6 Agenda Challenges with Describing Value of NGS to Payers Current Payer Coverage of NGS Coding and Payment for NGS Recent AMP Initiative to Determine Cost and Value of NGS Changing Payment Models for Oncology Care and Opportunities to Incorporate NGS Implications for Laboratories that Offer Oncology NGS 2016 Boston Healthcare Associates, Inc. 6

7 Challenges with Describing Value of NGS to Payers

8 The Multiple Components of the NGS Value Chain and Its Different Potential Clinical Applications Lead to Challenges in Describing Its Value Next-generation sequencing enables a shift from single gene tests to multiple gene panels and/or whole exome/genome sequencing. The full implications of having this ability are not yet fully understood. Complexity of NGS Value Chain Re-defining Common Misconceptions Pre-Analytics Sample preparation DNA extraction Perception NGS is always accurate Actuality The accuracy of NGS can vary widely based on the platform used, experiment design, lab protocol, and quality of the sample Sequence Analysis Use of different platforms Technical work Quality checking Cost of NGS is $1000/genome This may not reflect the actual cost of either assay design/execution or the value that the testing provides Bioinformatics Result Output/ Interpretation Pipeline development/updating Need for on-going assessment of accuracy of reference databases Clinical positioning Utilization of data obtained Possibility of integrated care Possible Value Additions NGS can be used either as: 1) A potentially cost-saving replacement for multiple rounds of diagnostics tests/procedures (e.g., avoidance of a diagnostic odyssey) 2) A means of securing additional valuable clinical information by examining a broader array of information all at once (e.g., FoundationOne pancancer panel) 2016 Boston Healthcare Associates, Inc. 8

9 Possible Complexities/Variables Targeted panel vs. single genes - How many genes define one panel? - Floor/ceiling for # of genes - Defining limit of detection Platform variability/combinations required - Sample preparation/dna extraction - Bioanalyzer, Tapestation, Q-bit, Ion Torrent, MiSeqDx * etc. - Varies on a lab-to-lab basis *For In Vitro Diagnostic Use - Lab preference, volume of inputs, type of assays, etc. Interpreting/reporting/analysis - Custom pipeline? - Interpretation of data is sometimes out-sourced - Prior medical curation makes a huge difference in terms of how long it takes to interpret data 2016 Boston Healthcare Associates, Inc. 9

10 Current Payer Coverage of NGS

11 Current Coverage of NGS Payers see value in promise of personalized medicine, but have concerns about potential ability of NGS tools to drive up use of expensive targeted therapies without significant evidence Plan are inclined to cover biomarkers that are mentioned in guidelines and/or that are linked to certain therapies (e.g., companion diagnostics) Most payers currently have negative coverage policies regarding NGS oncology applications - Likely driven by negative coverage of expensive broad tumor panel profiling by FoundationOne, CarisDx, etc. A few plans however, are now covering specific applications (Priority Health and United) - These focus on NSCLC patients with advanced stage cancers Payers have not yet incorporated new Immuno-oncology concepts (e.g., molecular tumor burden analysis) into coverage policies 2016 Boston Healthcare Associates, Inc. 11

12 Population Palmetto, CGS, and Cahaba have developed policies that allow for limited coverage of NGS MolDX (Palmetto/ CGS/ Noridian) Advanced NSCLC (stage IIIB or IV) who are lifetime nonsmokers or light smokers, negative EGFR, ALK, or ROS1 (using non NGS methods) Cahaba NGS UnitedHealth Priority Advanced NSCLC (stage IIIB or IV), when patient has had previous gene-specific lab testing Advanced NSCLC (stage IIIB or IV), newly diagnosed patients not treatable by resection/radiation OR previously diagnosed patients not responding to systemic/targeted therapy Metastatic NSCLC (stage IV) Newly diagnosed metastatic NSCLC (stage IV), cancer of unknown primary, hematologic malignancies w/ actionable mutations, other metastatic solid tumors (certain conditions apply) Coverage Comprehensive somatic genomic profiling, tumor tissue only; must include ALK, BRAF, EGFR, HER2, KRAS, MET, ROS1, and RET NGS on new specimen tumor tissue only; must include ALK, BRAF, EGFR, HER2, KRAS, MET, ROS1, and RET Genomic profiling using code (5-50 genes, solid organ neoplasm) NGS for EGFR, HER2, RET, and ALK rearrangements at lab approved by NY State Department of Health Multi-marker tumor panels using NGS Non-Coverage Genomic profiling for germline (i.e. inheritable) mutations Genomic profiling for germline mutations, generic (non disease specific) panels of 51+ genes Not otherwise indicated Not otherwise indicated Not otherwise indicated These policies do not explicitly mention tissue-only sampling; liquid biopsy may be covered 2016 Boston Healthcare Associates, Inc. 12

13 MolDX Local Coverage Determination (LCD) for Comprehensive Genomic Profiling for Non-Small Cell Lung Cancer In 2015, Palmetto s MolDX program released an LCD for comprehensive genomic profiling for Non-Small Cell Lung Cancer: This policy provides limited coverage for comprehensive somatic genomic profiling (hereafter called CGP) for patients with metastatic non-small cell lung cancer (NSCLC) who are lifetime non-smokers (also known as neversmokers) or former light smokers ( 15 pack year history) and who tested negative for epidermal growth factor receptor (EGFR) mutations and EML4-ALK translocations when initial testing was done by an FDA-approved companion diagnostic (CDx) or by a laboratory developed test (LDT) for these genomic alterations. Alterations detected by CGP, if positive, may allow individuals to be treated with a targeted therapy for which they were previously ineligible. At the current time, CGP for germline (i.e. inheritable) mutations is not a Medicare benefit. The LCD also provides guidance related to CGP test metrics and performance: CGP analysis is defined as a single test that does not distinguish between somatic and germline alterations and can detect the following classes of alterations: - Base pair substitutions (including single nucleotide variants (SNVs)) - Insertions and deletions (Indels; up to 70 bp) - Copy number variations (CNVs; including both amplifications (ploidy < 4 with copy number = 8) and homozygous deletions (ploidy < 4 with copy number = 0) - Translocations Under the guidance, labs are also required to report testing volumes and clinical outcomes data to MolDX every 6 months - Must include alterations in ALK, BRAF, EGFR, HER2, KRAS, MET, ROS1, and RET This policy had been adopted by each MolDX-affiliated MAC (CGS, Noridian, Palmetto) 2016 Boston Healthcare Associates, Inc. 13

14 United Healthcare covers NGS for Stage IV NSCLC patients United Healthcare has also released a commercial coverage policy titled Molecular Profiling to Guide Cancer Treatment It states that: Molecular profiling using multiplex or next generation sequencing (NGS) technology is proven and medically necessary for guiding systemic chemotherapy in patients with metastatic stage IV non-small cell lung cancer (NSCLC) when both of the following criteria are met: - Molecular profiling using multiplex or NGS technology is used to test for epidermal growth factor receptor (EGFR) mutations, human epidermal growth factor receptor 2 (HER2) mutations, RET rearrangements, and anaplastic lymphoma kinase (ALK) gene arrangements - The laboratory providing molecular profiling testing services must be approved by the New York State Department of Health for performing the molecular profile test Codes 81445, 81450, 81455, and (unlisted MAAA) were listed Interestingly, United s policy does not explicitly mention tissue-only sampling suggesting liquid biopsy methods may be covered 2016 Boston Healthcare Associates, Inc. 14

15 Coding and Payment for NGS

16 Labs performing these tests could potentially use a variety of codes to describe their procedure Code Miscellaneous Option 81479: Unlisted molecular pathology code Possible Payment Rate Inconsistent (% of Billed Charges, nonpayment) Molecular Pathology (MoPath) Tier 1/2 Code Stack using analyte specific codes: Payment is dependent on payer acceptance of coding methodology. As GSP codes gain traction, payers may reject the use of MoPath code stacking. MolDX has said they are no longer accepting code stacking for multi-gene tests Genomic Sequencing Procedures (GSP) 81445: Targeted genomic sequence analysis panel, solid organ neoplasm, DNA analysis, 5-50 genes 81455: Targeted genomic sequence analysis panel, solid organ or hematolymphoid neoplasm, DNA and RNA analysis when performed, 51 or greater genes 81445: $ (2016) 81455: Carrier-priced (2016) Recent PAMA legislation may have an impact on the payment rate of both the molecular pathology code stack option and the GSP options (payment rates may decrease by up to 10% annually from , and 15% from ) 2016 Boston Healthcare Associates, Inc. 16

17 Timing of Payment Determinations for New Non- Advanced Diagnostic Laboratory Tests (ADLT) Lab Tests Under Protecting Access to Medicare Act (PAMA) Data Collection and Reporting Period for non-adlt Clinical Laboratory Tests Q1 Data Collection Period Q2 Q3 Q4 Data Reporting Period Q1 Q2 Q3 Q4 Used for Data Collection Period Data Reporting Period Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Used for Medicare Clinical Lab Fee Schedule (CLFS) rates will be re-collected and measured every 3rd year for 3 years for non-adlts. ADLTs will be revised annually Boston Healthcare Associates, Inc. 17

18 AMP Initiative to Determine Cost and Value of NGS

19 Earlier this year AMP published the findings of a study on the Cost and Value of NGS Association for Molecular Pathology Help define the cost and value of NGS applications in certain applications so that it can be clearly articulated to payers Define best practices ( create a template ) so that others may conduct similar supportive analyses Cost-base of NGS Examine the true cost of testing for different types of NGS applications X-linked or hearing loss Whole Exome Tumor Panels Micro-costing of NGS which provides a baseline estimate for labs which would like to describe their own assays Value-base of NGS Analyze the health economic impact of NGS testing in different clinical areas X-linked or hearing loss Whole Exome Tumor Panels Define essential types/categories of supportive health economic value stories through providing examples AMP launched the initiative to help define the cost and value of GSPs and mitigate future payment and reimbursement issues for them. The availability of these tools will help AMP members who want to participate in this growing field articulate the cost and value of what they are doing Boston Healthcare Associates, Inc. 19

20 Micro-costing Analysis Areas Application Personnel Time Cost of Equipment Bioinformatics/Reporting Description Amount of hands on time by laboratory personnel and those involved in creating/draft test reports (analysts, laboratory directors) Pricing for supplies and equipment associated with protocol Software (commercial or internally developed), equipment, and time used to assess data generated by GSP We collected many key personnel and bioinformatics inputs during calls/meetings with laboratory personnel and collected cost data from vendors Boston Healthcare Associates, Inc. 20

21 With the use of tools such as liquid biopsy and NGS, more patients are likely to be put on high-cost therapies indicated to treat cancers with a given biomarker status, but more patients may also be indicated for trials or hospice Current Care Paradigm Care Paradigm with Broad Tumor Panel Testing Targeted Tx - Successful Targeted Tx - Unsuccessful Not Targeted Tx - Successful Not Targeted Tx - Unsuccessful Clinical Trials Targeted Tx - Successful Targeted Tx - Unsuccessful Not Targeted Tx - Successful Not Targeted Tx - Unsuccessful Clinical Trials Hospice Hospice Patients receiving tumor panels may be more likely to be prescribed successful therapies / treatment options (green shades) compared to those not receiving tumor panels (orange shades). Tumor panels patients may also more likely to enter hospice sooner or be indicated for clinical trials, both of which may help payers offset costs incurred by starting more patients on targeted therapies. We need data to validate these assumptions. Charts are meant to be illustrative 2015 Boston Healthcare Associates, Inc. 21

22 Changing Payment Models for Oncology Care and Opportunities to Incorporate NGS

23 Payers are implementing innovative payment and utilization control models to decrease costs, particularly for high-cost patient populations Prior Authorization Requirements Oncology Management Programs Oncology Care Pathways Accountable Care Organizations Medical Homes Episodic Payments A set of criteria are applied when evaluating a case for coverage for the particular drug, device, or product Third-party vendors used by payers to control costs by managing patient access to drugs and tests that will not benefit the treatment and management of their disease Oncologist-driven collaborative payer / physician programs that influence compliance on the front end of care by reviewing NCCN guidelines and selects a sub-grouping of pathways which work most of the time Contractual relationships between providers and payers that incentivize cost reduction and quality improvement through shared savings and other financial risk models Coordinates care to treat symptomatic patients and relies upon preventive care by aligning hospitals, healthcare delivery organizations, payers, PCPs, and specialists Payment arrangements that include financial and performance accountability for defined episodes of care (e.g., gastrointestinal hemorrhage, major bowel procedures, gastrointestinal obstruction) 2014 Boston Healthcare Associates, Inc. 23

24 To Be Successful in Both the Current and Future Payment Environments, the Laboratory Industry Needs To Be Prepared for Both a Cost-based and Value-based Evaluation Of GSPs Payment for Next-Generation Sequencing Current Paradigm Future Paradigm Fee-for-Service Payment Reform LANDSCAPE New codes describing certain NGS tests in CPT 2015 CMS has stated they will use gapfilling method to value these codes This means commercial payers and Medicare carriers will be responsible for assigning individual values to different tests In either case, the assessment will likely focus on the cost of performing the assay LANDSCAPE Accountable care organizations and bundled payments (e.g., Florida Blue Oncology ACO and United Healthcare programs with upfront fees/contracts for entire course/total cost of care) Laboratory testing may be paid for as part of the overall delivery of care as opposed to separately Value of NGS needs to be articulated in the broader context of care/ability to show payer level/institutional savings PREPARATION Assemble thorough cost assessment materials to provide to Medicare a realistic assessment of the true cost of NGS as they commence value assignment activities Prepare health economic models for commercial payers to support per test payment PREPARATION Coordinate industry efforts to clearly define the value of NGS Prepare health economic story to articulate the value of NGS for entities receiving bundled payments for care (provider groups, hospitals, hospital systems) 2016 Boston Healthcare Associates, Inc. 24

25 Implications for Innovators

26 Implications for Innovators Identify specific applications of NGS which can substantially impact clinical care in a cost-effective way Create evidence which shows the clinical and economic value of NGS - Not just analytic validity/accuracy but also clinical utility relative to an often less than perfect current care paradigm Hone and articulate a value message which moves beyond cost of analytics into value of applications - Including the value of assay development and bioinformatics /analytics Prepare for a move from a payer-centric to a provider-centric payment model 2016 Boston Healthcare Associates, Inc. 26

27 Contact Charles Mathews Vice President (617) Boston Healthcare Global Headquarters 75 Federal Street, 9 th Floor Boston, Massachusetts USA Boston. Washington DC. Berlin. Hong Kong