Topics. HCCA Research Compliance Confereence. May 31-June 3, Why are changes in Personalized Medicine Important to Me?

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1 Billing and Compliance Concerns in Personalized Medicine Paul Papagni, JD CIP Executive Director of Research Holy Cross Hospital Kelly Willenberg, MBA, BSN CEO Kelly Willenberg, LLC Topics LDT s and Personalized Medicine Review of CLIA regulations relating to the need for a CLIA certified lab when conducting Biomarker driven clinical trials Understanding New FDA guidance on LDT s Determination of the need for an IDE What is billable when utilizing genetic panels for research and/or personalized medicine and what is CMS Coverage with evidence development Why are changes in Personalized Medicine Important to Me? Technology is advancing faster than regulations and guidance Biotech advances permit extraction of molecular, protein, genetic data from FFPE Physician are interested in molecular markers to assist with clinical decisions - Personalized medicine Physicians/Investigators want to gather data to further validate and qualify the utility of the biomarker Patients often compete for access to samples for inclusion in clinical trials finite supply of material available Deciding what tests (or how many) can be done and when Practicing pathologists may be confused about how to handle requests for use of these materials is it clinical use or research Institutions want to know What tests can be used & Who will Reimburse? 1

2 Issues? Is There Proof that test is: Analytically Valid accurate and reproducible Clinical Validity is there an association between the assay results and the clinical outcome of interest Clinical Utility ability of the assay to improve clinical decision-making and patient outcomes Who owns samples Priority of use Care vs Research Performed in CLIA Lab Clinical Care and Research? Level of Proof needed for Clinical Use/Utility, for Billing? What CPT code for Billing Develop Panel How do you determine Charge Prorated charge for all or a sum of the individual tests? Is medical necessity required for panel or for each individual marker? Personalized Medicine Defined by the NCI as: a form of medicine that uses information about a person s genes, proteins, and environment to prevent, diagnose, and treat that disease. LDT s are important to the continued development of personalized medicine But? Are the tests reliable? And - Can Utility be demonstrated so that payment issues may be resolved? 5 What is a Laboratory Developed Test A test developed within a laboratory that is used in patient management and has both of the following characteristics: The test is performed by the clinical laboratory in which the test was developed; and The test is neither FDA-cleared nor FDA-approved. 2

3 Personalized Genetic Testing What Can Genes Tell Us Give us a better understanding of the underlying biology of the trait in question Serve as direct targets for better treatments Pharmacogenetics how genetic makeup affects individual's response to drugs Interventions Give us better predictions of who might develop disease Give us better predictions of the course of the disease Lead to knowledge that can help find a cure or prevention Laboratory Developed Tests (LDTs) Utilize scientific and clinical discoveries and technological innovation to offer clinical laboratory testing not otherwise available Typically developed at the request of, and in close collaboration with, clinical caregivers Fill important gaps in diagnosis and/or characterization of disease states Why Are LDT s Important LDTs can be used to measure or detect a wide variety of analytes (substances such as proteins, chemical compounds like glucose or cholesterol, or DNA) Some LDTs are relatively simple tests that measure single analytes, such as a test that measures the level of iron Other LDTs are complex and measure or detect numerous analytes (For example, DNA variations can be detected from a blood sample, which can be used to help diagnose a genetic disease.) 3

4 Challenges for Molecular Testing and Personalized Medicine Until Now FDA Exercised Enforcement Discretion on LDTs Based On: Mostly non-commercial and Locally provided Tests generally used FDA-approved components Test methods generally well established, accessible Most tests were single signal tests Used simple, well-defined chemical, biological, or immunological principles (IHC, RIA, etc.) Clinician/Pathologist/Patient relationships Simple software calculations Performed by specialists with advanced training and require expert interpretation (karyotype, IHC) Small test volumes CMS Regulation of LDTs FDA s exercised enforcement discretion, leaving their regulation to Centers for Medicare and Medicaid Services (CMS) under the Clinical Laboratory Improvement Amendments (CLIA) But does CLIA Adequately address issues such as: Assessing analytical or clinical validity of LDTs prior to their marketing, Require adverse event reporting, Require removal of unsafe devices from the market, Impose manufacturing quality standards, or require informed consent for patients who participate in LDT clinical studies. 12 4

5 Topics LDT s and Personalized Medicine Review of CLIA regulations relating to the need for a CLIA certified lab when conducting Biomarker driven clinical trials Determination of the need for an IDE Understanding New FDA guidance on LDT s What is billable when utilizing genetic panels for research and/or personalized medicine and what is CMS Coverage with evidence development CLIA in Research Review of CLIA regulations relating to the need for a CLIA certified lab when conducting Biomarker driven clinical trials 14 Initial Response Emphasis on CLIA Guidelines Ensure that all lab tests, including LDTs, are accurate, reproducible, and reliable Require analytical validation of all lab tests prior to clinical use* Require proficiency testing/inter-laboratory comparison for all analytes tested* Require ongoing monitoring of the clinical validity of mod/high complexity test results * Cessation of testing with poor performance 5

6 What CLIA Covers Registration and inspection Facilities Personnel qualifications & responsibilities Quality systems Quality control and quality assurance Pre-analytic, analytic, post-analytic Proficiency testing What CLIA Does Not Cover Regulatory approval of tests themselves Determination of clinical utility of tests These are the domain of the FDA Though FDA has legal authority to regulate laboratorydeveloped tests, to date it has chosen only to regulate marketed test kits Research Exception 42 CFR 493.3(b)(2) Exception. These rules do not apply to components or functions of research laboratories that test human specimens but do not report patient specific results for the diagnosis, prevention or treatment of any disease or impairment of, or the assessment of the health of individual patients. 6

7 CLIA applies when Patient specific results are reported from the laboratory to another entity AND The results are used for health care for individual patients Implications for Research Under current CMS interpretation, research testing must be done in CLIA-certified lab whenever investigator anticipates returning individual results to participant, or to person responsible for his/her care within or outside the study, or test results will be used to inform actions that affect the individual, or test results will be used for screening, eligibility, etc. Research Vs Care Physician order molecular tests for patients molecular test is not fully recognized as basis for making clinical decisions What level of evidence is required to justify reliance on a test If the level of evidence necessary to justify recognition has not been achieved, then is the intent merely to further analyze a correlation between the test and outcomes = Research. Should Physicians be prevented from ordering tests that they strongly believe have clinical significance to their patient? but which is not (presently) reimbursable by insurance who pays for the test 7

8 Types of Studies Research Registry s Tissues and Data Repositories Institutional Repository Departmental Multi-center Genetic Studies Archival Collections Biomarker Driven Clinical Trials Industry Sponsored Trials How do you restrict secondary analysis 22 Benefits of this CLIA Standards Use of CLIA-certified lab for research testing implies high standard of quality control Especially critical when test results will be used to inform interventions But important to avoid giving people erroneous results, even when no action is contemplated based upon test results Topics LDT s and Personalized Medicine Review of CLIA regulations relating to the need for a CLIA certified lab when conducting Biomarker driven clinical trials Determination of the need for an IDE/IVD Understanding New FDA guidance on LDT s What is billable when utilizing genetic panels for research and/or personalized medicine and what is CMS Coverage with evidence development 8

9 What is an investigational IVD? An investigational IVD is not legally marketed for the intended use or indication for use identified in that study, whether or not it has been previously cleared or approved for a separate intended use. Intended use: How will the device will be used in the therapeutic product trial? e.g., how will test results drive treatment assignment? Encompasses: Analyte to be detected Type of result (quantitative, semi-quantitative, qualitative) Specimen type(s) Disease to be screened, monitored, treated, or diagnosed Target subject population etc. Those IVD devices that are used in therapeutic product studies according to the intended use/indications for use described in their cleared or approved labels, i.e., onlabel use, are not considered investigational. Investigational use requires an exemption from premarket approval requirements for new drugs and devices. Investigational use of IVD tests: IDEs and INDs Sponsors of therapeutic product trials that incorporate an investigational IVD must consider regulations that pertain to both drugs and devices. Exemptions from premarket approval requirements for new drugs and devices. Investigational Device Exemption (IDE) regulation (21 CFR 812) Investigational New Drug (IND) regulation (21 CFR 312) IDE and IND regulations have different requirements! 26 IDE Regulation IVD (21 CFR 812) purpose is to encourage, to the extent consistent with the protection of public health and safety and with ethical standards, the discovery and development of useful devices intended for human use, and to that end to maintain optimum freedom for scientific investigators in their pursuit of this purpose. An IDE is a regulatory submission that permits clinical investigation of devices/ivds. An approved IDE permits a device to be shipped lawfully for the purpose of conducting investigations of the device without complying with other requirements of the Food, Drug, and Cosmetic Act (Act) that would apply to devices in commercial distribution. Focused on risk Delegated responsibilities 9

10 An IDE allows you to ship an IVD without meeting the following requirements: Misbranding Registration and listing Performance standards Premarket notification Premarket approval Banned device regulation Restricted device regulation Good manufacturing practice/quality System regulations (except design controls) Analytical Performance/Validity in an IDE Does the test measure the correct analyte? Does the test measure the analyte reliably? Precision, reproducibility, sensitivity, specificity, etc. Risk dependent. The extent of analytical validation required for a pivotal trial exceeds what is required for feasibility studies. For a companion diagnostic, analytical performance around the cutoff/reference range is critical. A Risk-Based Approach to IVD Regulation Need to think about the benefits and risks of a test For an IVD tests, it is important to think about the risks associated with false positives or false negatives. What would happen if the test results are wrong? Are the benefits greater than the risks of inaccurate results? False positive: the patient would receive unneeded treatment, be exposed to treatment risk without benefit False negative: the patient would not receive needed treatment. For companion diagnostics, this will depend on the disease, the risks of treatment with the drug, and other treatment options (e.g., standard of care)

11 All Device Investigations Studies Subject to the IDE Regulation Studies Exempt from the IDE Regulation Significant Risk Full Requirements Non-Significant Risk Abbreviated Requirements IDE Exempt Exemption from an exemption = even more exempt 812.2(c)(3): A diagnostic device [is exempt], if the sponsor complies with applicable requirements in (c) [labeling] and if the testing: (i) Is noninvasive, (ii) Does not require an invasive sampling procedure that presents significant risk, (iii) Does not by design or intention introduce energy into a subject, and (iv) Is not used as a diagnostic procedure without confirmation of the diagnosis by another, medically established diagnostic product or procedure. e.g., retrospective studies Nonsignificant risk (NSR) Does not meet the definition of significant risk (SR) in 812.3(m). Abbreviated requirements Labeling (812.5) IRB approval Informed consent (part 50) Monitoring (812.46) Records ( ) and reporting ( ) (sponsor and investigator) Prohibition against promotion and other practices (812.7.) No IDE application to the FDA required. Meeting the abbreviated requirements means that you have an approved application for an IDE Example: Stratification 11

12 Significant Risk (SR) Significant risk device (812.3(m)) means an investigational device that: 1) Is intended as an implant and presents a potential for serious risk to the health, safety, or welfare of a subject; (2) Is purported or represented to be for a use in supporting or sustaining human life and presents a potential for serious risk to the health, safety, or welfare of a subject; (3) Is for a use of substantial importance in diagnosing, curing, mitigating, or treating disease, or otherwise preventing impairment of human health and presents a potential for serious risk to the health, safety, or welfare of a subject; or (4) Otherwise presents a potential for serious risk to the health, safety, or welfare of a subject. In other words, does the use of the IVD guide patient care? Eg, patient selection IMPORTANT CONSIDERATIONS FOR THE INVESTIGATIONAL USE OF COMPANION DIAGNOSTICS Companion diagnostic uses in a clinical drug trial. Patient enrollment Assigning patients to study arms Dosing Monitoring A significant risk IVD will usually be one that influences how a patient is treated. In such cases, an IDE will be required for an investigation even if there is an IND for use of the drug, or if the drug is IND exempt. A trial may not proceed until it has received IND and/or IDE approval AND IRB approval. BALANCED APPROACH TO IVD RISK Context and effect of an incorrect test result Cancer is a serious disease. Any effect on a treatment decision arising from IVD use poses significant risk. More Risk Less Risk Cancer is a serious disease. Large and unmet medical need makes any IVD risk minor. Accrual by test result Rx assignment Safety signal for Rx Convenience biomarker Weak/conflicting info on biomarker effect Invasive sampling All-comers accrual Stratification No known effective Rx Targeted biomarker Strong biomarker effect known Non-invasive sampling 12

13 Assessing Risk 1. Will use of the investigational test results lead to some trial subjects foregoing or delaying a treatment that is known to be effective? 2. Will use of the investigational test results expose trial subjects to safety risks (e.g., adverse events from the experimental therapy) that (in some net sense) exceed the risks encountered with control therapies or non-trial standard of care? 3. Is it likely, based on a priori information about the investigational therapy, that incorrect test results would degrade the safety or efficacy of subjects treatment? 4. Does specimen acquisition, done for investigational testing and outside the standard of care, require an invasive sampling procedure that presents significant risk? Topics LDT s and Personalized Medicine Review of CLIA regulations relating to the need for a CLIA certified lab when conducting Biomarker driven clinical trials Determination of the need for an IDE Understanding New FDA guidance on LDT s What is billable when utilizing genetic panels for research and/or personalized medicine and what is CMS Coverage with evidence development Registration and Listing Requirements FDA intends to continue to exercise enforcement discretion for Registration and Listing requirements if laboratories notify FDA of their existing LDTs within 6 months of publication of the final LDT guidance After 6 months, Notification (or R&L) of all New LDTs prior to offering the LDT for clinical use Includes notification for significant changes to the marketed intended use of existing LDTs Purpose: To collect sufficient and relevant information to help external panels recommend, and to help FDA determine, the appropriate classification of LDTs and prioritize enforcement of premarket review requirements 13

14 Proposed Notification Elements: 1. Laboratory Name 2. Laboratory Contact address 3. Test Name 4. Monthly Test Volume 5. Intended Use 6. Description of Clinical Use of Test 7. Description of what is measured or detected? 8. Description of disease or condition for which the diagnostic device is indicated 9. Description of the patient population 10. Does the patient population include pediatric patients? 11. Sample Type 12. Test Method 13. Is the Test a modification of an FDA cleared/approved test? 14. Brief description of the modification LDTs Changing View Many LDTs offered today differ from LDTs offered when enforcement discretion was initiated higher risk tests more complex validation required marketed nationally rely on complex equipment and software often deliberate LDT model to avoid oversight Often a mechanism for market entry of novel tests Higher proportion in commercial labs and biotechnology companies Often no clinician/pathologist/patient relationship FDAs Evolving Policy (Draft) Blanket enforcement discretion no longer a good model for LDTs Introduce oversight framework Risk-based = highest risk first Phased-in Some carve-outs to remain under enforcement discretion 14

15 FDA s Current Proposal 1.Collect basic information on all LDTs through new notification process (i.e., no-fee alternative to R&L) 2.Use public process (i.e., advisory committees) to obtain input on risk and priority for regulation 3.Phase-in regulatory framework over ~9 years based on risk 4.Continue some enforcement discretion for specific categories determined by FDA to be in the best interest of public health Public Health Need for Greater Oversight Evolution of LDT technology, marketing, and business models has: Increased risk associated with LDTs Created gaps in LDT Oversight Consequences Significant adverse health consequences Unnecessary healthcare costs Could undermine progress of personalized medicine, which depends on tests that work Increasing Concerns About Public Health Impact of LDTs Incorrect diagnoses of ovarian cancer Led to unnecessary surgeries to remove ovaries Profiled in The New York Times (Aug. 28, 2008) Incorrect prediction of tumor types (Duke Univ. Study) Exposed some patients to ineffective therapies Left other cancer patients untreated Profiled in The New York Times (July 7, 2011) Incorrect diagnoses of whooping cough False whooping cough epidemic at Dartmouth medical center Thousands given unnecessary antibiotics and/or vaccine 1,000 healthcare workers furloughed Profiled in The New York Times (Jan. 22, 2007) 15

16 Topics LDT s and Personalized Medicine Review of CLIA regulations relating to the need for a CLIA certified lab when conducting Biomarker driven clinical trials Determination of the need for an IDE Understanding New FDA guidance on LDT s What is billable when utilizing genetic panels for research and/or personalized medicine and what is CMS Coverage with evidence development Is It Billable? Do these tests fit the definition of Medically Necessary? reasonable and necessary to diagnose or treat illness or injury Are they Experimental/Investigational? For Panel Testing (NGTS) do you apply standards individually or to the Panel as a Whole e.g. is each test medically necessary? Is the panel taken collectively Experimental/Investigational? 47 Returning to Original Question Is There Proof that test is: Analytically Valid accurate and reproducible Clinical Validity is there an association between the assay results and the clinical outcome of interest Clinical Utility ability of the assay to improve clinical decision-making and patient outcomes 48 16

17 Clinical Trial Coverage of Tests IDE Category A devices: Yes, with Medicare medical director approval if used in immediately life threatening disease or condition IDE Category B devices: Yes, with Medicare medical director approval Post-marketing approval FDA-required studies: Yes, some may require Medicare medical director approval 49 Categories of Devices Possibly Covered Under Medicare FDA Approved Through the PMA Process FDA Approved Through the 510K Process FDA Approved IDE Category B Devices Humanitarian Device Exemption IRB Approved Devices FDA Approved Post- Marketing CED studies 50 The Studies That Need Codes and Modifiers 51 17

18 52 DEVICE TRIAL QUALIFYING DOCUMENTATION Question Does the device have an IDE? Question Is the device approved by the FDA? Yes No Yes No Coverage Eligibility Summary If the device has an IDE what category is it? Category A Category B If the device is FDA approved is it being studies on-label or offlabel? On-Label Off-Label Comments Comments Question Yes No Supporting Explanation Is the study eligible for coverage? Kelly Willenberg, LLC IDE COVERAGE PRINCIPLES SUMMARY Category A Category B Trials involve immediately life-threatening condition (if trial was initiated before January 1, 2010) All trials Device not covered Device covered if not provided free by sponsor or promised free Payment for device and related services many not exceed what Medicare would have paid for a comparable approved device and related services Routine care services may be covered Routine care services covered CMS and/or MAC approval required CMS and/or MAC approval required Device is never covered Services IDE Number ICD-9 Code V70.7 (Secondary diagnosis) Q0 or Q1 Modifier Physician Services Outpatient Services Condition Code 30 NCT# Device IDE number HCPCS device code (if applicable) (Physician and outpatient) Q0 (Physician and outpatient) Charges or token charge (outpatient) Services IDE Number ICD-9 Code V70.7 (Secondary diagnosis) Q0 or Q1 Modifier Physician Services Outpatient Services Condition Code 30 Kelly Willenberg, LLC 2015 NCT# 54 18

19 RULES YOU NEED AT YOUR FINGERTIPS Coverage with Evidence Development (CED) is a CMS designation identifying CMS-sponsored research projects CED: Medicare may make an NCD that requires participation in certain clinical trials, longitudinal studies, or registries for coverage of an investigational item/service and routine and related items/services. All CED studies are listed on the Centers for Medicare & Medicaid Services (CMS ) CED Website at: Evidence-Development/index.html Kelly Willenberg, LLC RULES YOU NEED AT YOUR FINGERTIPS Clinical Trial Policy (NCD 310.1) Medicare Benefit Policy Manual: Chapter 14 (Devices) Chapter 15 (Miscellaneous Services) Medical Claims Processing Manual: Chapter 32 (Billing Requirements for Special Services) Kelly Willenberg, LLC COVERAGE WITH EVIDENCE DEVELOPMENT (CED) Policy tool that allows health insurers to offer temporary payment for these promising- treatments while patients are enrolled in clinical study designed to provide key information about the safety and/or effectiveness of the treatment. CED is a form of accelerated approval applied in the reimbursement context, allowing promising technologies to secure reimbursement while important uncertainties are addressed through further studies. If the CED study shows that the new treatment is better than existing options, the insurer may expand coverage to more beneficiaries or decide to cover the treatment permanently. Conversely, the insurer may restrict coverage for treatments that do not lead to better patient outcomes. The main purpose of CED is to help doctors and patients make better choices about treatment. Kelly Willenberg, LLC

20 Payor Issues Medicare covers FDA exempted devices including Category A and B with preapproval for billing Private Payors and Medicaid do not have to follow Medicare Pre-authorization and Pre-approval with certification is necessary Know what coverage a patient has prior to discussing options 58 Example Language The test or procedure that is being used in this trial is commercially available and the Example company is certified by federal and state agencies (CLIA) in the United States to perform this test. Your insurance company will be billed for the cost of the test. Representatives from Example Company are available to answer any questions that you or your insurance company may have about the cost of the test or reimbursement for the test (please call 1-8XX-XXX-XXXX). If your insurance company denies payment of the test, Example Company will appeal this denial. It is likely that you will be receiving statements, or Explanation of Benefits forms (EOB), from your insurer. These are not bills. We would like to assure you that, as a participant in this trial, should Example Company be unsuccessful in receiving reimbursement for all or some of the cost of this assay after appeal, you will have no financial responsibility for the test or procedure. Patients will not be responsible for a co-pay or a deductible for cost of this test. Example Company might ask your doctor to provide medical information in order to assist them in processing health insurance claims, in a way very similar to the process used to cover other costs of their care. 59 Contact paul.papagni@holy-cross.com kelly@kellywillenberg.com Thank you for coming! 60 20