getting paid for advanced diagnostics€¦ · mckesson analysis across 50m lives indicates 1/3 of...
TRANSCRIPT
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
3
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
McKesson Decision Management Overview
Critical Trends Impacting Labs/Reimbursement
Key Challenges/Opportunities For Labs
Strategies to Shift to Value-Based Reimbursement
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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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
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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Unidentifiable
Tests
Lack of Clinical
Evidence
Limited Point-
of-Care
Information
Increased
Payer Scrutiny
Critical Trends Impacting Labs/Reimbursement
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Unidentifiable
Tests
Lack of Clinical
Evidence
Limited Point-
of-Care
Information
Critical Trends Impacting Labs/Reimbursement
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
Critical Trends Impacting Labs/Reimbursement
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?
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Unidentifiable
Tests
Lack of Clinical
Evidence
Limited Point-
of-Care
Information
Critical Trends Impacting Labs/Reimbursement
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
Critical Trends Impacting Labs/Reimbursement
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
McKesson Decision Management Overview
Critical Trends Impacting Labs/Reimbursement
Key Challenges/Opportunities For Labs
Strategies to Shift to Value-Based Reimbursement
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
McKesson Decision Management Overview
Critical Trends Impacting Labs/Reimbursement
Key Challenges/Opportunities For Labs
Strategies to Shift to Value-Based Reimbursement
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
Strategies to Shift to Value-Based Reimbursement
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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