I received two emails from Joe Plandowski, a frequent contributor to Lab Soft News, indicating that CMS is abruptly cutting its reimbursement for the UroVysion test. Below is a cut-and-paste of his emails including his personal analysis of the news:
I don't know whether you are aware of a disaster befalling Abbott's molecular test, UroVysion, effective January 1, 2011. CMS has announced a separate code which covers that test and moreover appears to be aimed specifically at that test. The financial impact is dramatic, basically resulting in a 50% cut in Medicare reimbursement. Many believe Abbott has been taking advantage, with its pricing policy, of the fact that it has the only FDA-cleared test for bladder cancer. This CMS decision brings into play a discussion of proprietary molecular tests and the prices charged for them. Not an easy issue to solve. Without patent protection no company is going to spend the millions needed to develop such tests and get them FDA cleared. On the other hand, prices charged for such patented tests boggles the minds of laboratorians accustomed to tests priced well under $100.
UroVysion is the only FDA-cleared test for bladder cancer, allowing Abbott to seek a high price for the test kit. The situation is similar to the advantage enjoyed by Myriad with its predictive markers for breast cancer.The labs performing the UroVysion must be market-competitive so I don't believe there is a markup problem on their end except for the non-insured. The reason is that the Medicare reimbursement fees, or a percentage of those fees, dictate what the private insurance companies will pay.
We are now faced with the challenge of Medicare cutting the reimbursement for UroVysion in half. After subtracting Abbott's UroVysion price for the kit and a lab's labor and investment in equipment, the lab's bottom line profit for the lab is zero or very close to it. I'm sure Abbott is not broadcasting this news to the world. However, and as labs performing UroVysion will soon discover, they won't be paid by Medicare under the old codes (88367 and 88368) and will need to submit the new codes (88120 and 88121) which pay at a rate of about half of the old codes. If I was running a lab, I would announce to my clients that the UroVysion test would no longer be available through my lab and that I would send their patients' specimens to an available reference lab, if one exists.
All this news is only a couple of weeks old. You will see more about it in the lab press. Abbott probably sells an estimated $200M of UroVysion tests a year. Not a big hit for a multi-billion dollar revenue corporation. It's not as if the test will disappear. Physicians will order it. I just don't know who will perform it. Abbott could offer attractive discount pricing to the large lab players based on some volume basis to keep their UroVysion business alive. I would also look for non-FDA cleared (ASRs) bladder cancer tests to appear in the market. It's a perfect time for this to happen.
Here are some details about the UroVysion test from the
ARUP web site:
The UroVysion Bladder Cancer Kit ... is designed to detect aneuploidy for chromosomes 3, 7, 17, and loss of the 9p21 locus via fluorescence in situ hybridization (FISH) in urine specimens from persons with hematuria suspected of having bladder cancer.
I tried to turn up more news about this change in CMS reimbursement policy on the web but drew a blank. The Abbott UroVysion
web site is
temporarily unavailable. Interesting! As Joe indicates, this is a major announcement for those in the lab world but a big yawn for the rest of the country, at least for now.
Comments