CMS Decision Helps Unlock the Potential of Next-Generation Testing

David Parker, PhD
Published: Friday, Aug 17, 2018
David Parker, PhD

David Parker, PhD

In March of this year the Centers for Medicare & Medicaid (CMS) announced a final national coverage determination (NCD)1 that expanded coverage for next-generation sequencing (NGS) tests used as companion diagnostics for patients with cancer. The determination was made through a petition from the provider of a commercial NGS-based, multigene panel test, but its provisions have implications for any NGS-based cancer test provided to Medicare beneficiaries. The ruling will inevitably influence the coverage thinking of commercial payers as well.

The NCD is a significant development in expanding access to NGS tests for guidance of cancer treatment. The various NGS technologies enable rapid, relatively inexpensive, and high-depth mutation analysis of large numbers of genes in parallel. As such, NGS is well suited to mutation analysis for cancer, in which numerous genes have the potential to drive tumorigenicity, and a variety of targeted therapeutics are available. Although NGS can be used for single-gene analysis, its real clinical power stems from the ability to deliver a large amount of genomic information that can go beyond guiding a treatment decision for a single drug to informing an entire treatment program for a patient with cancer.

Paradoxically, it is just this wealth of information provided by NGS-based, multigene panel tests that previously inhibited payers’ coverage. With dozens of cancer-related genes being analyzed, and without FDA approval or clearance of any indications for use, payers found it difficult to determine whether such multigene tests were medically necessary for any particular type of patient. It should be noted that prior to mid-2017, all multigene NGS panel tests were laboratory developed tests (LDTs) under Clinical Laboratory Improvement Amendments. Factoring in their high cost, and the availability of cheaper, single-gene companion diagnostic tests for the available targeted therapeutics, payers frequently denied coverage.

Faced with this conundrum, over the past several years, some providers of NGS-based panel tests have worked to obtain FDA authorization via premarket approval application or 510(k) clearance, and at least 5 have now achieved this status (Table).2 Armed with the resulting defined indications for use, these providers could work with payers to establish medical necessity in those indications. The NCD is the greatest result of these efforts to date, but like most NCDs, it provides only a framework for coverage, not the details of what Medicare payment will be or how it will happen.

What the NCD Says

The CMS coverage determination grants national Medicare coverage to in vitro diagnostics (IVDs) that use NGS technology, are FDA approved or cleared as companion diagnostic tests, and are performed to determine patient eligibility for appropriately indicated drugs for a class of patients with cancer defined by the NCD.

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