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HHS Announces First LymeX Diagnostics Prize Winners

Federal Insider: January/February 2023

The Department of Health and Human Services (HHS) announced 10 phase 1 winners in the LymeX Diagnostics Prize. A partnership between HHS and the Cohen Foundation, the competition aims to nurture the development of human diagnostics toward Food and Drug Administration review.

Fifty-two organizations have entered the competition, using techniques from radiological imaging to genomics sequencing to microfluidics. They also use different types of samples, including urine, whole blood, and serum. Some submissions also used approaches from diagnostics for other infectious diseases, including SARS-CoV-2. Winners each receive $100,000 and can move on to the second phase of the competition.

The phase 1 winners include BlueArc Biosciences, Drexel University College of Medicine, George Mason University, HelixBind, InBios International, Massachusetts General Hospital, Serimmune, T2 Biosystems, Tufts University, and Virginia Tech.

Laboratories currently use a two-tier serological testing system that is only accurate 4−6 weeks after infection, the announcement noted.

Future phases are expected to focus on clinical and nonclinical validation of diagnostic tests that detect active infection by Lyme-disease-causing bacteria, as well as readiness for regulatory submission and entry into the market.

CMS SEEKS DIGITAL PRIOR AUTHORIZATION SYSTEM BY 2026

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would require some payers to implement an electronic prior authorization process and shorten the timeframes for payers to respond to prior authorization requests through electronic exchanges by 2026.

The rule would require use of a Health Level 7-based application programming interface, known as an API, to support electronic prior authorization. Payers also would have to include a specific reason when denying requests, publicly report certain prior authorization metrics, and send decisions within 72 hours for urgent requests and 7 calendar days for standard requests.

The proposed rule would apply to Medicare Advantage organizations, state Medicaid and Children’s Health Insurance Program agencies, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan issuers on the federally facilitated exchanges. CMS said a more efficient electronic system would save physician practices and hospitals more than $15 billion over a 10-year period.

FEDERAL INVESTIGATORS SUSPICIOUS OF SARS-COV-2 ADD-ON TESTS

The Department of Health and Human Services Office of Inspector General (OIG) issued a report finding that a small number of labs billed Medicare for “questionably high” levels of tests alongside SARS-CoV-2 tests in 2020. This boosted the payments they received and raises “concern about potential waste or fraud, suggesting a need for further scrutiny of billing by these labs,” according to OIG.

The so-called add-on tests included respiratory pathogen panels, genetic tests, and allergy tests—along with SARS-CoV-2 tests. OIG noted that while it is not unusual for labs to bill for SARS-CoV-2 tests and other tests on the same claim, specific billing patterns—such as a high volume of or high payments for add-on tests—raised concerns.

OIG found that 378 labs billed Medicare Part B for add-on tests at questionably high levels—in volume, payment amount, or both—compared to 19,199 other labs they studied. They also found a small number of labs that had at least 10 claims where two labs had billed for the same enrollee for the same tests on the same day, which could indicate fraud.

Part of the concern is that some of the 378 labs billed for add-on tests in combinations that had little variation across patients. “This may indicate that these tests were not specific to individual patients' needs,” OIG said.

For example, one lab regularly billed for a combination of five add-on respiratory tests on almost all of its claims for SARS-CoV-2 tests, resulting in an average claim of $666. The average payment to other labs was $89. OIG referred the problem labs to the Centers for Medicare and Medicaid Services for further review.

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