Medicare reimbursement policy helps physicians incorporate pharmacogenetics into practices.

By Tom Johnson

The use of genetic information to inform diagnosis and treatment is one of the fastest-growing areas of medicine. Understanding genetics is also the core of personalized medicine, making possible the development of treatments designed for the molecular make-up of specific, individual patients.

Personalized medicine has implications for virtually all medical disciplines, with theoretical applications from the prosaic to the fantastic. At the headline-making, visionary end of the spectrum are customized drugs designed and assembled by nanobots to precisely suit a particular patient. Drugs like that are years off, awaiting changes in technology that will make individualized drugs economically possible.Not all use of personalized medicine lies so far in the future; there are techniques and technologies being broadly applied today. Pharmacogenetics – the use of genetic data to choose medications and set dosages – is, in certain medical specialties, close to becoming standard of care. The reason for that is the clarity of the correlation between genetic variations and the metabolism of drugs,coupled with the desperate need of patients and the healthcare system to lower costs and improve outcomes.

Picking up Traction
Where is personalized medicine getting the most traction? In the expensive or vague quadrants of a medical practice where it’s worth giving the unconventional a try:

• In oncology, where the cost of treating a single patient can run to six figures.
• In pain management, where physicians have never before had a way of knowing whether a patient seeking additional drugs is truly in pain or diverting their drugs to other uses.
• In psychiatry, where prescribed anti-depressants are as of ten ineffective as effective.

Despite the above, the eagerness to apply pharmacogenetics to intractable medical problems has been met with resistance. Until recently, single-gene tests cost thousands of dollars and were prescribed with little or no consistency. Pharmacogent ic s has been ca l led “evidence-based medicine for which there is no evidence.”

However true that may have been a few years ago, the evidence has begun to pile up, along with anecdotes about more effective care. That has convinced physicians to seek guidance in adopting personalized medicine into their own practice. That guidance has come
primarily from small, specialized labs and academic institutions.

Medicare Revamps Billing Codes
With doctors ordering hundreds of thousands of tests so new they didn’t have CPT codes to identify them, payers needed to rationalize the prescription and reimbursement of pharmacogenetic tests. Taking the lead, naturally enough, has been Medicare.

In January 2013 Medicare announced a revamp of billing codes that, for the first time, recognized the value of pharmacogenetics. The revamp replaced the ad hoc stacking of CPT codes with codes specific to the most pharmacogenetically significant genes.

For example, a meaningful genetic result might require more than 50 discreet actions, each billed separately. Under the new system, the result itself has been given a single code paying a single rate.

Just what that rate might be, Medicare didn’t say. Without going into numbing detail, the traditional ways of pricing medical tests didn’t work for pharmacogenetics. For the first quarter of 2013, physicians could order the test, laboratories could perform the tests, but no one could get reimbursed for the tests.

Significant Threats
Going several months without payment posed a signif icant threat to the specialized labs that have been most effective at helping physicians incorporate pharmacogenetics into their medical practice. Worse still, when the rates finally did come out, the cuts were drastic. Reimbursement for CYP2D6, the gene most broadly applicable in the metabolism of drugs, dropped more than 75 percent, from $628 to $148. Others dropped just as precipitously, with regional variations caused by Medicare’s decision to leave reimbursement specifics to regional administrators.

The result was a chaotic, low margin reimbursement structure that Forbes online said “has the potential to stymie one of the most important and potentially cost-saving technologies in the pipeline.”

It would have done that by making capital investment in the human and technological infrastructure of genetic testing less attractive, in effect penalizing the early-stage, specialized labs that take the time to work closely with physicians. Business would be driven instead to national labs focused on the per formance of commodity medical tests that need little or no interpretation.

Specialized Lab and Medical Practitioners Collaboration
There are rumblings that the previously announced rates are going to be modified to support, rather than hinder, the growth of pharmacogenetics. Medicare adminstrators realized that, in this formative period of personalized medicine, collaboration between a specialized lab and medical practitioners is essential to the adoption of personalized medicine and the resulting improvement of patient care. Pushing testing toward labs that have little or no interest in that collaboration will frustrate that adoption, impacting the people who need help most— patients who turn to personalized medicine because conventional care offers inadequate relief.

That was certainly not what Medicare had in mind, and their swift action in reversing the unintended consequences of their decision is worth acknowledgement.

Tom Johnson is the direector of communications of PGXL Laboratories, a Louisville-based pharmacogenetics laboratory.