Friday, March 30, 2018

Pushing Around ADLT Prices through Appeals in Year 1

Pricing rules for ADLT allow payment at list price in Year 1 (actually for 3 quarters) and then payment at the average price of Year 1 in Year 2.    CMS gets a recoupment when the CMS list payment in Year 1 has proven to be more than 130% higher than the actual observed commercial median payment in Year 1.

I've made a model system where an ADLT has 900 sales to Medicare and 900 sales to commercial in Year 1, and 6,000 sales to medicare and 6000 sales to commercial in Year 2. 

List price is $4000.   Actual commercial payments in all years are 1/3 $1000, 1/3 $2000, 1/3 $3000. 

In Year 1, the lab accepts payment for all its $3000 commercial cases, but appeals all the $1000 or $2000 payments into Year 2.   Thus, its commercial median payment in Year 1 is $3000, which sets its Medicare rate for Year 2.

Since $4000 CMS paid list price in Year 1 is 133% of the later observed commercial median of $3000 in Year 1, CMS recoups 3% x (900*$4000) = 3% x ($3.6M) = $118,800 in Year 2.

Total CMS payments in Year 1 are 900*$4000 = $3.6M, 6000*$3000 = $18M in Year 2, and with the small clawback, this is net of $21,481,200 in the two years for 6900 cases, giving an average CMS payment of $3,113.

Had CMS paid all cases at the actual commercial median for both years, which was always about $2000, CMS would have paid the ADLT lab 6900*$2000 or $13.8M instead of $21.4M.   Thus, despite the clawback rule, which applies only to Year 1, it is fairly easy to get net payments over 2 years that are 150% or more of the actual commercial medians.


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Spreadsheet in cloud here.

For an OIG report on "gaming" of hospital quality metrics, here.
For an OIG report on data problems in PAMA data, here.

Friday, March 23, 2018

Tuesday, March 13, 2018

Modifier 59 and X Modifiers - Saga to 2018

2014 article on creation of X modifiers

2015 article on X modifiers

2018 Update on X modifiers

Thursday, March 8, 2018

HBR Publishes Case Study, Interview about Adaptive Trials

  • Harvard Business School has published a 26-page case study about Adaptive Trials, download for $9, here.    
  • Read an interview with the author, here.

The interview is from Harvard's business school case study podcast series.   The case is about GBM-AGILE, which starting as an ad hoc working group to make a blueprint for adaptive studies in GBM.   The case study is about converting the blueprint from the drawing board to a real world funded study.

For a different perspective on GBM Agile see these two links:


I recently pulled up a few new review articles on umbrella and basket and adaptive trials.

Open Access, see Savoia 2017, Clin Sci 131:2671 [view is general but focus is cardiology], here:

...Not open access, but sound good:

Renfro 2017, Ann Oncol 28:34, Statistical Controversies... [in such trials],  

Simon 2017, Clin Pharm Ther 102:934, Critical review... [of such trial designs], 


See also Simon 2017 in Ann Intern Med, 165:270, Adaptive oncology trials...

See also Renfro 2017, Cancer Lett, 387:121, Precision oncology: new era of trials...

See also Renfro 2016, Cancer Treat Rev 43:74, Clinical trial designs incorporating predictive biomarkers...

See also Beckman et al. 2016, Clin Pharm Ther 100:617, Adaptive dsign for confirmatory basket trial...

NGS Sequencing and Reimbursement: Panel at PMWC 2018 (Feb 2018) Video

Updated Chart on BRCA Payments by Year 2014, 2015, 2016, with Natl, State, and Lab Data

I've written about the quirky range of BRCA coding and payments in different geographies under Medicare Part B.   It's a big deal; in 2016 it was about $70M payments at anywhere from $900 to $2600 per patient, depending on coding choices and MAC claims processing.   There were about 31,000 patients in CY2016, so the minimum payment would have been 31,000x$900 or about $31M, and the maximum about 31,000x$2600 or about $81M.   For most of these, a median payment would be 81432+81433 or $1400, giving $43M.

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Chart above.  Dollar data sums codes.  Utilization data assumes 81211/81213 or 81432/81433 patients overlap.   Payments are dollars allowed, including deductibles, so they are slightly less than fee schedule pricing.     Overall patient/dollar volume was up about 20% from 2014 to 2015, and up a total of about 70% from 2014 to 2016.

Data sources are:
Data sheet, as shown in figure above, in the cloud, here.

I also charted UTAH STATE VOLUME of dollars and patients over NATIONAL VOLUME of dollars and patients.   Utah percent of total dollar volume and total patient volume appears to drop from 84% to 72% to about 40%.

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My first blog on 2016 state level data, when the data was just newly released, early November 2017, was here.  The charts above are generally a superset that gives a 2014 2015 2016 view at one glance.