Let’s improve molecular diagnostics reimbursement for the sake of public health

Guest commentary: broad uptake of molecular diagnostics hinges on reimbursing doctors

Enough is enough already. We could and should have a national system of molecular diagnostic instruments, with networked reporting, to enable the widespread practice of molecular medicine.

It’s 2020, and I feel a need to quote a TV show of the 1970’s, “We have the technology.” (Wink to all those over 40.)

Why are we often guessing about causative pathogens in the routine management of suspected pneumonia, flu-like illness and severe upper respiratory infections?

Why do most patients with advanced cancer die without knowing if a precision medicine could have helped?

If we cared more about these questions -- and by caring I mean if we adequately reimbursed diagnostics labs and physicians -- we would be better positioned to distribute and adopt new tests, such as a diagnostic for COVID-19 or cancer genomic profiling.

With such reimbursement, the treatment of infectious disease and cancer would be immediately and radically transformed. And our healthcare system would be better positioned to detect emerging pathogens and to realize the full promise of oncology precision medicine.

Location Matters

Whether a patient with moderate to severe respiratory or flu-like symptoms undergoes testing for the causative pathogen has a lot to do with where they seek care.

In the outpatient setting, a doctor could send a nasal swab but may not bother if they are confident in their clinical diagnosis and favor expectant management.

For inpatients, there is a negative financial incentive to swab since each test is a cost center that gets taken out of the hospital’s diagnosis-related group (DRG) payment bundle for the day. If the patient is sick enough or there is enough uncertainty around the proper medical regimen, the cost-benefit analysis may tilt towards testing.

In cancer, broad-based genomic profiles are essential to the diagnosis and treatment of rare subsets of advanced cancer that respond well to targeted therapy. Yet most tertiary cancer centers have been providing cancer genomic profiles as a loss leader, in the name of academic research or philanthropy, as they wait for full reimbursement and regulatory clarity.

Regional and local cancer centers have either declined to provide the service or have leaned on lab startups -- underwritten for now by financial investors, pharmaceutical companies and philanthropists -- to test specimens sent through the mail.

Despite Medicare’s recent national coverage decision for these tests, coverage by private health insurers has been variable and questions remain about coverage.

The lack of understanding of how coverage issues are affected by the number of genes tested, whether a test has been formally named as a companion diagnostic to a drug, and whether an RNA or DNA method can be used has paralyzed many prospective adopters.

“We should regard local molecular testing like the electronic medical record--an essential strategic asset.”

Josh Bilenker, Loxo Oncology

For different reasons in infectious disease and cancer medicine, the outcome has been the same -- insufficient activation energy to create a more robust local testing architecture in molecular lab medicine. Pathologists and laboratory directors are under significant pressure to run a profitable small business for their hospitals. Expanding their testing menu and capacity requires persuasive financial modeling and advocacy from their clinical colleagues.

Meanwhile, these same clinical colleagues would be expected to perform a host of non-reimbursed or minimally reimbursed activities such as patient consent, specimen procurement, specimen logistics support, result interpretation, documentation and patient counseling.

It should be no surprise that inertia rules the day.

The problem is that while the system we have now works well to control healthcare spending, it results in a molecular lab ecosystem that is inherently fragile at the local level.

We have not offered proper financial incentives for community hospitals to invest in molecular medicine. In turn, when there is a crisis like COVID-19, or, an opportunity like precision medicine in oncology, we are unprepared. We should regard local molecular testing like the electronic medical record--an essential strategic asset.

Alternative reality

Imagine an alternate reality, where there are better financial incentives to build a robust, distributed network of installed laboratory instruments, real-time PCR readers, sequencers, mass spectrometers and even novel detection platforms.

In this world, we could afford to hire a skilled workforce to run the machines. Reimbursement of commercially available “kitted” reagents would incentivize routine use, as would payment to physicians who ordered molecular tests.

Results would be available quickly, since specimens would not need to travel through the mail, and they would be annotated with standardized common language so that doctors and patients could understand them. Lab information systems would be tied to the EMR with automated result reporting. Data could also be anonymized and aggregated so that practice groups, hospitals and public health officials could monitor trends and even disease outcomes.

The vision I describe could be achieved through better reimbursement for molecular lab testing.

Coverage language should be simplified and embraced by both public and private payers. Reimbursement should not vary between the outpatient and inpatient settings. Clinicians should be better compensated for the time they spend generating, interpreting and communicating this information.

Once in place, a network of local molecular testing labs could serve as the new front line for important public health questions and serve as jumping off point for novel therapeutics.

On the innovation side of the ledger, I would look out for vaccine programs for the common cold; novel anti-infectives for resistant pathogens; early detection of novel viral pathogens and resistant bacteria and fungi; increased utilization of cancer precision medicines; and a risk-adjusted payment system for PD1 inhibitors in cancer.

I think better reimbursement for molecular medicine would be better long-term healthcare policy.

In a world where political consensus is uncommon and the volume of new scientific information is overwhelming, de-centralized networked intelligence may be the answer.

We’re running too lean in a corner of the healthcare system that punches above its weight in terms of cost to value. What a rare gift to be able to solve a structural problem vital to public health with a little bit of stimulus, while laying the groundwork for future breakthroughs.

Josh Bilenker is CEO of the Loxo Oncology unit of Eli Lilly and Co. (NYSE:LLY) and a senior associate in the Department of Health Policy and Management in the Bloomberg School of Public Health.
Signed commentaries do not necessarily reflect the views of BioCentury.

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