getting paid for advanced diagnostics€¦ · mckesson analysis across 50m lives indicates 1/3 of...

Getting Paid For Advanced Diagnostics: Partnering with Payers to Shift to Value-Based Reimbursement

Matt Zubiller

VP, McKesson

Decision

Management

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Learning Objectives

McKesson Decision Management Overview

Critical Trends Impacting Labs/Reimbursement

Key Challenges/Opportunities For Labs

Strategies to Shift to Value-Based Reimbursement

Agenda

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Learning Objectives

Understand critical trends impacting the

reimbursement of molecular and genetic tests

Recognize how current and future payer strategies

may affect your business.

Opportunities for labs to move towards value-based

reimbursement

Leverage this information to implement a strategy to

move towards becoming a value-based lab provider

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Learning Objectives





Agenda

Providers 200,000 Physicians

10,000 Long-Term Care Facilities

5,000 Hospitals (VA & DoD)

750 Home Care Agencies

Laboratories 250+ labs with over 1.5B

transactions per year

Payers 300 Health Plans

Govt: VA, DoD, CMS & 40 States

Manufacturers 400 Pharmaceutical

2,000 Medical-Surgical

950 Consumer Product

Pharmacies Over 26,000 Locations

Consumers 30 Million Covered Lives

360° View of Healthcare

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6

Payment Management

Identify clinical &

contractual

appropriateness of

claims

Detect fraud and

abuse

Clinical & financial

analytic tools

Decision Management

Evidence-based

clinical criteria

(InterQual®)

Decision Support

(Clear OrdersTM,

Clear CoverageTM)

Z-Code Identifiers

(McKesson Diagnostics

ExchangeTM)

Network Management

Provider networks

tailored for specific

customers &

products

Network

performance driven

by optimizing

reimbursement mix

Provider

administration

McKesson Health Solutions

Care Management

Efficient chronic disease mgmt & triage Health and wellness Case management

Payer/Provider Collaboration

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Learning Objectives





Agenda

8

Unidentifiable

Tests

Lack of Clinical

Evidence

Limited Point-

of-Care

Information

Increased

Payer Scrutiny


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Unidentifiable

Tests

Lack of Clinical

Evidence

Limited Point-

of-Care

Information


Increased

Payer Scrutiny

Lack of Clinical Evidence

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** Source: UnitedHealth Center for Health Reform & Modernization/Harris Interactive survey of physicians,

January 2012

Only 20% of molecular diagnostic tests on the

market have evidence-based guidelines today**

No standardized definition or process for

Clinical Utility

Payers are requiring Clinical Utility for coverage

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Unidentifiable

Tests

Lack of Clinical

Evidence

Limited Point-

of-Care

Information


Increased

Payer Scrutiny

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Clinicians

unable to keep

up with rapid

changes in

genetic

medicine

Limited

applications to

introduce

evidence to the

“Point-of-Care”

Point-of-Care Information

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No

Yes

75%

Point-of-Care Information

Do you believe that there are patients in your practice who would benefit from having a genetic test?

** Source: UnitedHealth Center for Health Reform & Modernization/Harris Interactive survey of physicians,

January 2012

24.2%

26.7%

30.8%

34.2%

34.6%

52.5%

52.9%

55.4%

57.9%

74.6%

75.0%

0.0% 20.0% 40.0% 60.0% 80.0%

CLIA registration of lab

Local availability

Local expertise in interpretation

FDA Clearance

Insurance Pre-Auth Required

Cost

Inclusion in a guideline

Specificity

Sensitivity

Specific purpose of the test

Evidence supporting the recommendation

Point-of-Care Needs

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Source: NCCN Oncology Policy Summit: Molecular Testing.

Which of the following factors do you think are critical to have when making a decision about ordering a new molecular test?

http://www.nccn.org/professionals/meetings/oncology_policy_program/molecular_testing.asp

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Unidentifiable

Tests

Lack of Clinical

Evidence

Limited Point-

of-Care

Information


Increased

Payer Scrutiny

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"It is difficult to figure out how to reimburse

[genetic tests] with the coding system we have.

You can't distinguish one genetic test from

another because they all use the same CPT

codes.”

Joanne Armstrong, M.D., senior medical director, Aetna Inc., at Food and Drug Law Institute conference

McKesson analysis across 50M lives indicates 1/3 of MDx

spend is on these unidentifiable stacking code tests.

Unidentifiable Tests

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Source: Laboratory Economics, volume 6, no. 12, December 2011

Laboratory: Lab 1 Lab 2 Lab 3 Lab 4 Lab 5 Lab 6

Code stack: 83898(x2) 83891 83891 83890 83890 83891

83904(x2) 83896(x8) 83892 83898 83896(x7) 83892(x2)

83907 83898(x8) 83900 83907 83898(x7) 83898(x2)

83912 83907 83901(x4) 83909(x2) 83912 83904(x4)

88381 83912 83904(x5) 83912 88387 83909(x4)

83914(x8) 83912 83914(x4) 83912

88381 88381

Charge: $ 302.91 $ 636.63 $ 276.32 $ 379.29 $ 256.25 $ 258.36

Unidentifiable Tests

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Prevents Lab Differentiation

Prevents labs from being able to show the value

they deliver

Prevents ability to utilize Claims Data to Establish

Clinical Utility

Hinders Value Based Reimbursement

Although there are

changes to the

current coding system

in the works, it does

NOT cover every

MDx test on the

market today and will

NOT be able to keep

up with the rapid

growth in tests.

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0

500

1000

1500

2000

2500

3000

2005 2006 2007 2008 2009 2010 2011

Labs Diseases for which testing is available

Unidentifiable Tests Current coding systems cannot keep up with rapid growth

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Unidentifiable

Tests

Lack of Clinical

Evidence

Limited Point-

of-Care

Information


Increased

Payer Scrutiny

Increased Payer Scrutiny

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Increased MDx Spend = More Payer Controls

Unique identification of tests

Require clinical utility

Medical policy

Authorizations

Limited payer point-of-Care tools

Medical Loss Ratio (MLR)

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Patient Protection and the Affordable Care Act (PPACA)

60%

65%

70%

75%

80%

85%

90%

95%

100%

Historically Post-Reform

MLR ALR + Profit

Mandated Medical Loss Ratio of

85%

Refund medical spend < 85% to

members effective August 2012

Payers are forced to focus on

administrative costs as a driver for

profit

Transition utilization management

functions (administrative cost) to

laboratories

Solution: negotiate higher priced

medical services to lower

administrative burden

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Learning Objectives





Agenda

Key Challenges for Labs

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Increasing Payer Requirements

Labs need to understand and manage the changing payer

requirements for MDx testing

More Pre-Authorization, Medical Policy: conditional payment

Steerage: low cost provider, limited networks

Reimbursement:

More denials: appeal, reprocess, write offs, incomplete orders

Lower rates, capitation, ACO’s

Difficult to get payers attention, not a partner to payers

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Value-Based Provider

Clearly Identifies tests

Follows payer

medical policies

Provides decision

support at the point-of-

care

Drives proactive UM

Review/Share

results with payers

Test Provider

Business as usual

Reactive

Proactive Provider

Clearly Identifies

tests

Follows payer

medical policies

Provides decision

support at the point-of-

service

Opportunities for Labs: V

alu

e t

o P

ayer

High

Low

Level of Collaboration Low High

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Learning Objectives





Agenda

Transparency & Collaboration

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Measure then Manage

Is it covered by the

insurance?

Is the test appropriate

for this patient?

Is it covered by the payer?

Is there a Pre- Auth required?

Collaboration so that all parties involved know the answer to these questions:

Lab, Provider, Payer,

Collaboration

Test Identification

Catalog and Coverage

Determination

Payer and Lab Policies

Evidence Based

Decision Support Rules Engine

Data Analytics


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Provide Evidence-Based Decision Support

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Identification, Catalog & Coverage

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McKesson Diagnostics ExchangeTM

Unique test identification: McKesson Z-CodeTM

Identifiers

Standardized Technical Assessment

Marketing Tool for Laboratories

Individual Coverage/Pricing Determination

Commercial Payer Adoption/Standardized

Process

A Case in Point: Palmetto MolDx Program

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1. Unique Identification & Online Registry for MDx

tests

Increases transparency and reduces ‘me too’ tests

2. Standardized process for Coverage

Determination

Standardized, time-bound approach towards value-

based reimbursement

Technical Assessment tied to unique identifiers

A Case in Point: Palmetto MolDx Program

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McKesson’s role: Technology service provider

(McKesson Diagnostics ExchangeTM) and trusted

broker delivering smart stakeholder connectivity

Items to keep in mind:

Register for a Z-Code Identifier if you or partners are billing in

the J1 Region

Z-Code Identifiers are able to be used with other payers,

allow labs to promote tests in the online registry and allow

labs to participate in the online Technical Assessment

process to achieve Coverage

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Matthew B. Zubiller

Follow Us: @AdvancedDx

Getting Paid For Advanced Diagnostics: Partnering with Payers to Shift to Value-Based Reimbursement

getting paid for advanced diagnostics€¦ · mckesson analysis across 50m lives indicates 1/3 of...

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