First-Of-Its-Kind Decision: Medicare Will Now Cover Certain Diagnostic Tests Utilizing Next Generation Sequencing for Cancer

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As a result of the FDA-CMS Parallel Review Program, and representing a first-of-its-kind decision, the Centers for Medicare & Medicaid Services (CMS) issued a National Coverage Determination (NCD) on March 16, 2018 approving Medicare coverage and payment for diagnostic laboratory tests utilizing next generation sequencing, or NGS, for patients with certain types of advanced cancer.

According to CMS, “NGS oncology panel tests hold potential for patients and providers in optimizing (personalizing) therapies that target specific characteristics of individual patient cancers.”

The NCD was obtained by Foundation Medicine, Inc. (Cambridge, MA and Morrisville, NC). As an immediate result of the CMS decision, seniors in the Medicare and Medicare Advantage programs will be able to access the FoundationOne CDx™ cancer diagnostic test throughout the United States if they are diagnosed with Stage III or Stage IV cancer and meet the coverage criteria. FoundationOne CDx™ assesses all four classes of genomic alterations in 324 genes known to drive cancer growth, helping to guide treatment options. Arent Fox attorneys were pleased to assist Foundation Medicine in the NCD process.

While triggered by FoundationOne CDx™ under the parallel review with FDA, the new NCD is not product-specific, and outlines requirements that both patients and the specific tests utilized in a diagnostic lab must meet in order for coverage to apply. CMS indicated that since the acceptance of FoundationOne CDx™ into the Parallel Review program, “there have been three other companion in vitro diagnostic laboratory tests using NGS for advanced cancers approved by the FDA.”

The NCD Requirements

According to the NCD, the test must be ordered by a patient’s treating physician and must be performed in a CLIA-certified laboratory. The patient must be diagnosed with recurrent, relapsed, refractory, metastatic, or advanced stage III or IV cancer, and must not have been previously tested using the same NGS test for the same primary diagnosis of cancer. The patient must also have decided to seek further cancer treatment (e.g., therapeutic chemotherapy) following the performance of the test. Medicare would cover a “repeat” test using the same NGS test only when a new primary cancer diagnosis is made by the treating physician. CMS clarified in the NCD Decision Memo that “the final NCD does not limit the number or specific type of cancers eligible for coverage or laboratories including academic medical centers and community hospitals that are able to meet the coverage criteria.”

With respect to the test itself, the test must have FDA approval or clearance as a companion in vitro diagnostic and also have an FDA approved or cleared indication for use in the specific patient’s cancer. The test must provide the testing results to the treating physician for management of the patient’s condition using a report template to specify treatment options. The NCD does not define what format the “report template” should take, and CMS stated that the “decision allows laboratories and diagnostic laboratory test developers to determine what is included in the test report.”

For other uses of diagnostic laboratory tests utilizing NGS (i.e., tests without FDA approval or clearance as a companion in vitro diagnostic that has been cleared for the patient’s type of cancer), the NCD clarifies that local Medicare Administrative Contractors may evaluate and determine coverage on their own, through the issuances of Local Coverage Determinations.

New Options for Cancer Patients Opened by the NCD

The issuance of this new NCD represents an exciting development in personalized medicine and the options available to patients diagnosed with advanced stages of cancer. Until now, patient access has depended on an inconsistent patchwork of local Medicare contractor decisions, but CMS appears to have recognized that this new era of personalized medicine warrants a truly national coverage structure that Foundation Medicine and hopefully many other innovative organizations can now use as a road-map. Ultimately, the CMS decision recognizes that where one lives should not determine one’s access to life-saving diagnostic tests. 

Arent Fox’s Health Care and Government Relations groups regularly represent clients and monitor developments in Medicare coverage determinations and the review and approval of new diagnostic tests, devices, and pharmaceuticals. 

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