Crossing the Three Chasms: Complex Molecular Testing and Medicare Regulations

April 2, 2008

Excerpt:

“Crossing the Chasm: A New Health System for the 21st Century” has been cited thousands of times in the effort to bring transformational change to the American healthcare system. Published by the Institute of Medicine in 2001, the report describes a “chasm” between the circumstances of today and the possibilities of the future.

For molecular personalized medicine, not one but three chasms must be crossed. As we describe in detail, these chasms stem from new revisions to Medicare rules for billing jurisdiction, Medicare payment rules, and dilemmas in making coverage decisions for innovative technologies. Personalized medicine – getting the right treatment to the right patient at the right time – is a pillar of efforts to bring increased effectiveness and efficiency to healthcare. Frequently, this goal will be unattainable unless physicians have precise molecular information about the disease being treated. Therefore, it is crucial that the healthcare system facilitates the adoption of new molecular technologies when they are clearly effective. In this white paper, we demonstrate that several critical reimbursement barriers, or “chasms,” have emerged to block the progress of diagnostic molecular medicine. Unlike scientific or technological barriers, the three chasms facing molecular diagnostics are regulatory conventions. If not addressed, these conventions could easily present a more severe barrier to progress than do purely scientific challenges.

Two of the chasms (billing – Medicare’s specimen rules and coding – the US system of legacy code formats) are unintended consequences of certain regulations, coding conventions, and statutes. These rules are already in collision with the realities of molecular diagnostics, but the resulting problems could be solved by regulatory change or minor statutory change. The third chasm is the limitations of current approaches to evaluating the value of complex tests in molecular personalized medicine. Payers and providers do not have a standard body of tools for evaluating the effectiveness of new approaches, particularly when the results of a test substantially shift existing treatment pathways.

We suggest changes which will maintain national goals of paying for efficient, well-researched advances based on insightful medical review, while reducing arbitrary and sometimes very high barriers to these same goals.