By Clinical Informatics News Staff 

March 5, 2015 | The Association for Molecular Pathology (AMP), the main organization representing the interests of laboratory professionals performing molecular diagnostics in the U.S., has published a series of models estimating the cost and value of various testing procedures that involve broad next-generation sequencing of DNA samples. These types of tests, which AMP refers to as Genomic Sequencing Procedures (GSPs), are increasingly used to test multiple genes that may be involved in a disease case at once. Alternative testing methods, like polymerase chain reaction, cytogenetic assays, and narrow sequencing panels, can only test for one or a few specific genetic variants at a time, leading to diagnostic odysseys where possible causes of a disorder are ruled out one by one.

AMP is trying to quantify the costs and benefits of GSPs in the midst of an ongoing national debate on how payers should reimburse labs for performing these tests. The American Medical Association has been embarking on a mass revision of its CPT codes for genetic assays, which the government and other insurers use during reimbursement. With advice from AMP, new codes for GSPs began to be implemented this January; however, the Centers for Medicare & Medicaid Services (CMS) will not set national payment rates for these codes until January 2016. In the meantime, CMS has been relying on a gap-fill process by which individual contractors negotiate payment rates, resulting in a patchwork system where many labs feel shortchanged or struggle to be reimbursed in a timely fashion.

The cost-benefit models released by AMP look at three types of next-generation sequencing tests: broad panels of dozens of genes used to diagnose unexplained cases of hearing loss; panels of genes used in cases of non-small-cell lung cancer to choose targeted therapies; and whole exome sequencing, covering every protein-coding region of the genome, used to investigate mysterious rare diseases. Importantly, AMP wanted to be sure its cost model accurately factors in not only the equipment and consumables used during these GSPs, but also the computational pipelines used to analyze the results, and the process of interpreting those results to find likely disease-causing genetic variants, a much more intensive expert process than is needed for other kinds of diagnostics.

AMP surveyed a variety of labs performing next-generation sequencing across the country, including both academic and commercial labs, in some cases visiting the labs and sitting in on their procedures. The labs evaluated used different sequencing machines, commercial or homebrewed bioinformatics pipelines, and standard operating procedures for interpreting results. Combining the cost data from its subject labs, AMP arrived at proposed all-in costs for these three types of GSPs.

The organization also compared these tests to typical diagnostic odysseys they would replace. These “health economic value models” attempt to put dollar values on both cost savings over other testing methods, and benefits to the patient. Models like this are important to labs as they petition payers to reimburse them for broad next-generation sequencing. Of the three types of tests AMP evaluated, the organization concluded that the hearing loss and whole exome tests were less expensive than alternative methods, and that the non-small-cell lung cancer panel, while more expensive than narrower genetic tests, offered better value to the patient by finding targeted therapies earlier and more often.

All these models, including anonymized cost data from labs, can be downloaded for free from AMP’s website. Labs can also download a blank cost template to calculate their own costs for performing GSPs. AMP and its members will use data like this as they work to negotiate CMS’ final payment rates for the new GSP codes throughout this year.