CLN - Federal Insider

CMS Walks Back Coverage Decision on Laboratory Developed Tests

Federal Insider: May 2018

After strong resistance from AACC and other lab groups, the Centers for Medicare and Medicaid Services (CMS) said it would not limit payment for next-generation sequencing (NGS) tests only to those approved by the Food and Drug Administration (FDA). AACC had warned CMS that setting such a precedent would risk reimbursement for NGS tests, most of which are performed as laboratory developed tests (LDTs). An initial CMS proposal limiting payment to FDA-approved tests followed the parallel review with FDA of the FoundationOne CDx test that assesses alterations in 324 genes across multiple common cancers.

In its final decision, CMS said it would cover NGS cancer diagnostic tests approved or cleared by FDA and permit local Medicare Administrative Contractors to continue making decisions about paying for LDTs. This decision is also good news for future companion diagnostics. The policy will automatically give full coverage to FDA-approved or cleared companion in vitro diagnostics when the test has an FDA-approved or cleared indication for a patient’s cancer and test results follow a template that specifies treatment options.