An Example of Early ADLT Price Changes: 0340U

 These are the original MOLDX prices for SIGNATERA as set by MOLDX:

• For an exome and four plasma tests package, MolDx paid $5897.   For an exome and one plasma test, Moldx paid $3878.   For four plasma tests (no exome) MolDx paid $3177.

If you compare the $5897 price and the $3177 price, the latter dropping off the exome and lowering the price, MolDx "seemed" to value an exome at around $2800 (just using 2nd grade arithmetic).  

MolDx seemed to value each single PCR bespoke test at somewhere about $800 (using $3177/4).   MolDx late dropped specified test multiples from its DEX descriptors for policy and audit reasons.

For more on the above analysis, see earlier blog:

http://www.discoveriesinhealthpolicy.com/2021/06/medicares-somewhat-confusing-path-to.html

###

0340U

This is a new code for SIGNATERA which appears for the first time on the October 2022 fee schedule (being active for use on 10/1/2022).   

Signatera got ADLT pricing from July 2021 to March 2022 even though it did not have a PLA code yet (price per CMS ADLT table).   Code 0340U is now published and explicitly excludes prior exome testing from the code name (code work), and, pays $3500 per MRD test.   

For the CMS first-year ADLT rate, see here:

https://www.cms.gov/files/document/advanced-diagnostic-laboratory-tests-under-medicare-clfs.pdf

Presumably, under ADLT regulations, Natera reported first year pricing around March 2022 to CMS, which CMS would use to set its next price.  In fact, in the October 2022 CLFS, the 0340U price rises from $3500 to $3920.

See October 2022 fee schedule here:

(Note the code is "pan cancer" but Medicare coverage, as of 10/2022, is only for CRC MRD, immuno-therapy checkpoint drug response, and, bladder cancer MRD.  Also, the code specifies that prior tumor/germline testing was conducted.)

Note that Natera reported this $3920 price data to CMS in April 2022, and was aware that it would set the new price by May 2022.  (That is, the $3920 was noted in public Natera statements by May 2022 - here.  It's quirky there price went up long before they got a specific code to reflect this fact on a fee schedule on the CMS website.  The original plan for ADLT codes was that either AMA PLA would issue a code or failing that CMS itself would issue one quarterly, which would have been back in mid 2021.)

When will the price for 0340U change again?  I believe the $3920 will be  stable for a couple years.  

As I understand the ADLT pricing rules, Natera will gather its commercial pricing in 1H2023, report in 1Q2024, and that will set its new price for CY2025.    (And this ADLT pricing repeats annually, but also slowly as just shown).   

SInce most payments will be from Medicare Advantage plans in the first couple years, this will probably tend to replicate the $3920 price at least for a while.   At least til 2025, maybe til 2026, 2027.   

A Medicare Advantage regulation seems to state that Medicare Advantage plans shall pay out of network providers (when necessary to use them) at the prevailing Part B rates.  

See:  https://brucedocumentblog.blogspot.com/2022/04/medicare-advantage-and-price-based.html