Medicare Dx payment reform tackled in U.S. House bill

A bill reintroduced in the U.S. House of Representatives this week would, in part, modernize how Medicare reimburses medical diagnostic tests. And a major industry group is throwing its support behind the measure.

Known officially as the Modernizing Our Drug and Diagnostics Evaluation and Regulatory Network (MODDERN) Cures Act, the measure comes from the office of Republican New Jersey Rep. Leonard Lance, who previously introduced a version of the bipartisan legislation two years ago. AdvaMedDx, the diagnostics arm of the med tech industry group AdvaMed, is backing the bill as a change that is long overdue for the industry.

"Our longstanding view is that [the current reimbursement system is] an outdated approach that doesn't take into account the kind of investment it takes to bring a modern diagnostic to market. Nor does it account for the very significant, positive impact that diagnostics typically have on patient care," Andrew Fish, AdvaMedDx's executive director, told FierceDiagnostics in a telephone interview.

The bill in large part is designed to spur the development of new drugs to address rare diseases and degenerative conditions. And it contains provisions to spur the development of companion diagnostic tests in a way that "rewards efficiency and effectiveness" in the development process, according to Lance's office.

Specifically, that would stem, in part, from a revamp of how Medicare reimburses diagnostic tests. Right now, tests, whether they are traditional lab assays or more state-of-the-art molecular and genetic diagnostics tests, are covered under Medicare's Clinical Laboratory Fee Schedule, which is based primarily on the cost it takes a lab to perform a test. But as Fish notes, Lance's bill would require the Centers for Medicare & Medicaid Services (CMS) to also consider other factors, including the investment required to develop and bring a test to market, the impact that a new diagnostic test has on patient care and what other parties, including private payers, are paying for the particular type of test.

Fish told us that AdvaMed sees the changes as more appropriately reflecting the value of today's diagnostic tests.

"In many cases it could lead to higher payments," he said. "That is our belief."

While the bill would address one major complaint of the diagnostics industries, another remains: the challenge companies increasingly face in winning reimbursement for new tests once they gain regulatory approval.

- read Rep. Lance's official announcement
- here's the AdvaMed announcement

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