IVDT_In Vitro Diagnostics Technology

IVD Technology, November/December 2012

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TRENDS & PERSPECTIVES Bill Seeks to Reform IVD Reimbursement A new House bill seeks to update the system for reimbursing IVD manufacturers. HR 6446, known as the Improving Diagnostic Innovations Act of 2012, was introduced by Representa- tives Peter J. Roskam (R-IL) and Leon- ard Lance (R-NJ) and cosponsored by Rep. Richard E. Neal (D-MA). Th e goal of the proposed legislation is to better and more fairly reimburse IVD manufacturers, thereby providing them incentive for directing more of their resources toward innovation. Bill Details. Th e bill calls for improvements to the process for deter- mining fee-schedule amounts for new tests by taking into account each test's impact on patient care, its technical characteristics, claims data, lab charges, private insurance rates, advisory-panel recommendations, and "such other factors as the Secretary [of Health and Human Services] may specify." Seeking input from patients, clini- cians, and technical experts is also cited in the legislation as a means for improving the process for setting fees for new tests. Th is input will come from an "independent advisory panel" comprising individuals with clinical IVD expertise, patient representa- tives, practicing clinicians, "individuals with expertise in the requirements to develop, validate, and perform the new test," laboratorians, experts in phar- macoeconomics or health-technology assessment, and "individuals with expertise on the impact of new tests on quality of patient care, including genetic counselors." Th e writers of the bill also request a process for assigning temporary codes for new IVDs that can't be assigned an existing code. "Th e text of HR 6446 replicates the diagnostic-reform language from the previously introduced MODDERN Cures Act (HR 3497), which would reform diagnostics payment for new tests by establishing new payment- setting criteria that incorporate ele- ments of market value and take into account the contribution of diagnostics to healthcare outcomes," said Ashley McMaster, director, communications for AdvaMed. (AdvaMedDx provided input during the drafting of the bill.) Impact on Industry. Andrew Fish, Executive Director, AdvaMedDx, said, "Diagnostics manufacturers need to know that this bill, if passed, would fundamentally change the way the Centers for Medicare and Medicaid Services [CMS] sets rates for new IVD tests reimbursed under the Clinical Lab Fee Schedule." He pointed out that the current fee schedule was established 28 years ago, in 1984. Rates were set based on the time and materials required for a test—and little else. "Th is legislation, if passed, would require CMS to set reimbursement rates for new tests by taking into account additional criteria," Fish said, "including the resources it took to develop and validate a test, the impact of a test on patient care, and private and out-of-pocket payments." Th e leg- 10 IVD TECHNOLOGY | NOVEMBER/DECEMBER 2012 islation would require diagnostic reim- bursement rates to "more closely refl ect the real value of a test," he said. Glen Freiberg, RAC, of RCQ Consulting (San Diego), commented that the proposed legislation "appears to help streamline and organize the process" of setting reimbursement rates. "Th is is a good thing," he said, "but one never knows how it will be enacted until we see the activity." He pointed to wording within the "Clarifying Factors for Rate-Setting" subsection of the bill that explicitly states that "such other factors as the Secretary may specify" may be considered when setting reim- bursement rates. Freiberg expressed concern that such wording "leaves open the possibility for the resulting regulations to express political consid- erations rather than the balanced and multifunctional input provided by the advisory committee." He applauded the bill but advised "close monitoring in its execution." HR 6446 has been referred to the House Energy and Commerce Com- mittee and the Ways and Means Com- mittee. Check www.ivdtechnology.com for updates. —Maureen Kingsley ivdtechnology.com IMAGE BY FSTOCKFOTO/ISTOCKPHOTO.COM

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