EXAS » Topics » Reimbursement for Stool-based DNA Screening for Colorectal Cancer

These excerpts taken from the EXAS 10-K filed Mar 31, 2009.

Reimbursement for Stool-based DNA Screening for Colorectal Cancer

        Since August 2003, the date of commercial launch by LabCorp of its stool-based DNA colorectal cancer screening service, LabCorp billed insurers and received payment from numerous third-party payors for its screening service, including more than 350 health plans. However, none of these third-party payors ever issued formal policy approval for stool-based DNA screening for colorectal cancer..

        Following the inclusion of stool-based DNA screening in the colorectal cancer screening guidelines of the ACS and MSTF-CRC, twelve states and the District of Columbia have adopted legislative mandates requiring that stool-based DNA screening be included in available colorectal cancer screening options offered by certain categories of insurers in these states. These states include Alaska, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Missouri, Nevada, New Jersey, North Carolina and Rhode Island. In addition, in the second half of 2008, CIGNA, one of

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    the nation's largest insurers, included stool-based DNA screening among its covered benefits nationally. While we view inclusion of stool-based DNA screening for colorectal cancer in the state mandates and the positive coverage decision by CIGNA as important first steps in securing wide-spread coverage for stool-based DNA screening for colorectal cancer from private insurance carriers, we believe that obtaining strong reimbursement from payors and a positive coverage decision from CMS for our stool-based DNA screening technology will be among the necessary elements to achieving any material commercial success. Despite the positive coverage decision from CIGNA and the state mandates noted above, we do not anticipate material sales relating to ColoSure until strong reimbursement is negotiated between LabCorp and CIGNA and between LabCorp and other payors with which it maintains contracts.

            The United States Public Services Task Force, or USPSTF, a U.S. government-funded organization that reviews available peer-reviewed published studies to make an assessment of the benefits and risks of performing certain medical procedures, completed its 6-year update of its colorectal cancer screening guidelines in October 2008. At that time, the USPSTF, which can influence coverage decisions by payors, including CMS, determined that the evidence is insufficient (USPSTF Grade: "I" Statement) to assess the benefits and harms of both stool-based DNA and CT colonography, or virtual colonoscopy, as screening modalities for colorectal cancer. The USPSTF gave no score to these two new tests added to the ACS and MSTF-CRC colorectal cancer screening guidelines. Many payors base their coverage decisions around colorectal cancer screening on the recommendations of the USPSTF. Accordingly, our future plans may include working to accumulate and publish in peer-reviewed journals additional performance data, and patient compliance and preference data, that will be useful to the USPSTF, as well as to CMS, in conjunction with our request for reconsideration of our NCD application. We could incur significant time and costs to accumulate such additional data, which still may not yield positive results with the USPSTF or CMS. Additionally, despite the fact that our technology is included in the colorectal cancer screening guidelines of the ACS and MSTF-CRC, the FDA warning letter we received with respect to the PreGen-Plus testing service may have a similar impact on private third party payors in that, like CMS, those payors may defer reimbursement policy decisions with respect to our technology until such time, if ever, as our technologies are cleared by the FDA. Finally, certain members of the MSTF-CRC may fail to separately support the position of the MSTF-CRC, which could have a detrimental effect on our commercial and reimbursement efforts related to stool-based DNA screening.

            The National Committee for Quality Assurance, or NCQA, is a private, not-for-profit organization that, among other tasks, measures the performance of U.S. based health care plans. The performance measures quantified by the NCQA result in the Healthcare Effectiveness Data and Information Set, or HEDIS. We believe that HEDIS measures could be a factor used by consumers and employers when selecting among alternative healthcare plans in which to enroll. If our stool-based DNA screening technology for colorectal cancer screening is not recognized by NCQA as a test that contributes to a health plan's score for the colorectal cancer screening measure, health plans may not reimburse for stool-based DNA testing. Despite being included in the recently updated colorectal cancer screening guidelines of the ACS and the MSTF-CRC, there can be no assurance that stool-based DNA screening for colorectal cancer will be adopted by the NCQA as a test that contributes to increasing the score of the HEDIS colorectal cancer screening measure. The NCQA is currently reviewing the colorectal cancer screening measure and made its proposed changes available for public comment February 17, 2009 through March 17, 2009. The NCQA has determined not to include stool-based DNA screening in the draft 2010 HEDIS measure that will be used to evaluate 2009 health plan performance (a retrospective measure that in 2010 "looks back" at 2009 performance). A final 2010 HEDIS measure will be issued sometime after the results of the public comment period are analyzed. Such exclusion could materially limit our ability to secure third-party reimbursement and as a result, materially limit our revenues.

44


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Reimbursement for Stool-based DNA Screening for Colorectal Cancer

        Since August 2003, the date of commercial launch by LabCorp of its stool-based DNA colorectal cancer screening service, LabCorp billed insurers and received payment from numerous third-party payors for its screening service, including more than 350 health plans. However, none of these third-party payors ever issued formal policy approval for stool-based DNA screening for colorectal cancer..

        Following the inclusion of stool-based DNA screening in the colorectal cancer screening guidelines of the ACS and MSTF-CRC, twelve states and the District of Columbia have adopted legislative mandates requiring that stool-based DNA screening be included in available colorectal cancer screening options offered by certain categories of insurers in these states. These states include Alaska, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Missouri, Nevada, New Jersey, North Carolina and Rhode Island. In addition, in the second half of 2008, CIGNA, one of

43


Table of Contents


    the nation's largest insurers, included stool-based DNA screening among its covered benefits nationally. While we view inclusion of stool-based DNA screening for colorectal cancer in the state mandates and the positive coverage decision by CIGNA as important first steps in securing wide-spread coverage for stool-based DNA screening for colorectal cancer from private insurance carriers, we believe that obtaining strong reimbursement from payors and a positive coverage decision from CMS for our stool-based DNA screening technology will be among the necessary elements to achieving any material commercial success. Despite the positive coverage decision from CIGNA and the state mandates noted above, we do not anticipate material sales relating to ColoSure until strong reimbursement is negotiated between LabCorp and CIGNA and between LabCorp and other payors with which it maintains contracts.

            The United States Public Services Task Force, or USPSTF, a U.S. government-funded organization that reviews available peer-reviewed published studies to make an assessment of the benefits and risks of performing certain medical procedures, completed its 6-year update of its colorectal cancer screening guidelines in October 2008. At that time, the USPSTF, which can influence coverage decisions by payors, including CMS, determined that the evidence is insufficient (USPSTF Grade: "I" Statement) to assess the benefits and harms of both stool-based DNA and CT colonography, or virtual colonoscopy, as screening modalities for colorectal cancer. The USPSTF gave no score to these two new tests added to the ACS and MSTF-CRC colorectal cancer screening guidelines. Many payors base their coverage decisions around colorectal cancer screening on the recommendations of the USPSTF. Accordingly, our future plans may include working to accumulate and publish in peer-reviewed journals additional performance data, and patient compliance and preference data, that will be useful to the USPSTF, as well as to CMS, in conjunction with our request for reconsideration of our NCD application. We could incur significant time and costs to accumulate such additional data, which still may not yield positive results with the USPSTF or CMS. Additionally, despite the fact that our technology is included in the colorectal cancer screening guidelines of the ACS and MSTF-CRC, the FDA warning letter we received with respect to the PreGen-Plus testing service may have a similar impact on private third party payors in that, like CMS, those payors may defer reimbursement policy decisions with respect to our technology until such time, if ever, as our technologies are cleared by the FDA. Finally, certain members of the MSTF-CRC may fail to separately support the position of the MSTF-CRC, which could have a detrimental effect on our commercial and reimbursement efforts related to stool-based DNA screening.

            The National Committee for Quality Assurance, or NCQA, is a private, not-for-profit organization that, among other tasks, measures the performance of U.S. based health care plans. The performance measures quantified by the NCQA result in the Healthcare Effectiveness Data and Information Set, or HEDIS. We believe that HEDIS measures could be a factor used by consumers and employers when selecting among alternative healthcare plans in which to enroll. If our stool-based DNA screening technology for colorectal cancer screening is not recognized by NCQA as a test that contributes to a health plan's score for the colorectal cancer screening measure, health plans may not reimburse for stool-based DNA testing. Despite being included in the recently updated colorectal cancer screening guidelines of the ACS and the MSTF-CRC, there can be no assurance that stool-based DNA screening for colorectal cancer will be adopted by the NCQA as a test that contributes to increasing the score of the HEDIS colorectal cancer screening measure. The NCQA is currently reviewing the colorectal cancer screening measure and made its proposed changes available for public comment February 17, 2009 through March 17, 2009. The NCQA has determined not to include stool-based DNA screening in the draft 2010 HEDIS measure that will be used to evaluate 2009 health plan performance (a retrospective measure that in 2010 "looks back" at 2009 performance). A final 2010 HEDIS measure will be issued sometime after the results of the public comment period are analyzed. Such exclusion could materially limit our ability to secure third-party reimbursement and as a result, materially limit our revenues.

44


Table of Contents

Reimbursement for Stool-based DNA Screening for Colorectal Cancer




        Since
August 2003, the date of commercial launch by LabCorp of its stool-based DNA colorectal cancer screening service, LabCorp billed insurers and received payment from numerous
third-party payors for its screening service, including more than 350 health plans. However, none of these third-party payors ever issued formal policy approval for stool-based DNA screening for
colorectal cancer..



        Following
the inclusion of stool-based DNA screening in the colorectal cancer screening guidelines of the ACS and MSTF-CRC, twelve states and the District of Columbia have
adopted legislative mandates requiring that stool-based DNA screening be included in available colorectal cancer screening options offered by certain categories of insurers in these states. These
states include Alaska, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Missouri, Nevada, New Jersey, North Carolina and Rhode Island. In addition, in the second half of 2008, CIGNA, one of




43









HREF="#bg46501a_main_toc">Table of Contents







    the
    nation's largest insurers, included stool-based DNA screening among its covered benefits nationally. While we view inclusion of stool-based DNA screening for colorectal cancer in the state
    mandates and the positive coverage decision by CIGNA as important first steps in securing wide-spread coverage for stool-based DNA screening for colorectal cancer from private insurance
    carriers, we believe that obtaining strong reimbursement from payors and a positive coverage decision from CMS for our stool-based DNA screening technology will be among the necessary elements to
    achieving any material commercial success. Despite the positive coverage decision from CIGNA and the state mandates noted above, we do not anticipate material sales relating to ColoSure until strong
    reimbursement is negotiated between LabCorp and CIGNA and between LabCorp and other payors with which it maintains contracts.



            The
    United States Public Services Task Force, or USPSTF, a U.S. government-funded organization that reviews available peer-reviewed published studies to make an assessment of
    the benefits and risks of performing certain medical procedures, completed its 6-year update of its colorectal cancer screening guidelines in October 2008. At that time, the USPSTF, which
    can influence coverage decisions by payors, including CMS, determined that the evidence is insufficient (USPSTF Grade: "I" Statement) to assess the benefits and harms of both stool-based DNA and CT
    colonography, or virtual colonoscopy, as screening modalities for colorectal cancer. The USPSTF gave no score to these two new tests added to the ACS and MSTF-CRC colorectal cancer
    screening guidelines. Many payors base their coverage decisions around colorectal cancer screening on the recommendations of the USPSTF. Accordingly, our future plans may include working to accumulate
    and publish in peer-reviewed journals additional performance data, and patient compliance and
    preference data, that will be useful to the USPSTF, as well as to CMS, in conjunction with our request for reconsideration of our NCD application. We could incur significant time and costs to
    accumulate such additional data, which still may not yield positive results with the USPSTF or CMS. Additionally, despite the fact that our technology is included in the colorectal cancer screening
    guidelines of the ACS and MSTF-CRC, the FDA warning letter we received with respect to the PreGen-Plus testing service may have a similar impact on private third party payors
    in that, like CMS, those payors may defer reimbursement policy decisions with respect to our technology until such time, if ever, as our technologies are cleared by the FDA. Finally, certain members
    of the MSTF-CRC may fail to separately support the position of the MSTF-CRC, which could have a detrimental effect on our commercial and reimbursement efforts related to
    stool-based DNA screening.



            The
    National Committee for Quality Assurance, or NCQA, is a private, not-for-profit organization that, among other tasks, measures the performance of U.S. based
    health care plans. The performance measures quantified by the NCQA result in the Healthcare Effectiveness Data and Information Set, or HEDIS. We believe that HEDIS measures could be a factor used by
    consumers and employers when selecting among alternative healthcare plans in which to enroll. If our stool-based DNA screening technology for colorectal cancer screening is not recognized by NCQA as a
    test that contributes to a health plan's score for the colorectal cancer screening measure, health plans may not reimburse for stool-based DNA testing. Despite being included in the recently updated
    colorectal cancer screening guidelines of the ACS and the MSTF-CRC, there can be no assurance that stool-based DNA screening for colorectal cancer will be adopted by the NCQA as a test
    that contributes to increasing the score of the HEDIS colorectal cancer screening measure. The NCQA is currently reviewing the colorectal cancer screening measure and made its proposed changes
    available for public comment February 17, 2009 through March 17, 2009. The NCQA has determined not to include stool-based DNA screening in the draft 2010 HEDIS measure that will be used
    to evaluate 2009 health plan performance (a retrospective measure that in 2010 "looks back" at 2009 performance). A final 2010 HEDIS measure will be issued sometime after the results of the public
    comment period are analyzed. Such exclusion could materially limit our ability to secure third-party reimbursement and as a result, materially limit our revenues.




44









HREF="#bg46501a_main_toc">Table of Contents





Reimbursement for Stool-based DNA Screening for Colorectal Cancer




        Since
August 2003, the date of commercial launch by LabCorp of its stool-based DNA colorectal cancer screening service, LabCorp billed insurers and received payment from numerous
third-party payors for its screening service, including more than 350 health plans. However, none of these third-party payors ever issued formal policy approval for stool-based DNA screening for
colorectal cancer..



        Following
the inclusion of stool-based DNA screening in the colorectal cancer screening guidelines of the ACS and MSTF-CRC, twelve states and the District of Columbia have
adopted legislative mandates requiring that stool-based DNA screening be included in available colorectal cancer screening options offered by certain categories of insurers in these states. These
states include Alaska, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Missouri, Nevada, New Jersey, North Carolina and Rhode Island. In addition, in the second half of 2008, CIGNA, one of




43









HREF="#bg46501a_main_toc">Table of Contents







    the
    nation's largest insurers, included stool-based DNA screening among its covered benefits nationally. While we view inclusion of stool-based DNA screening for colorectal cancer in the state
    mandates and the positive coverage decision by CIGNA as important first steps in securing wide-spread coverage for stool-based DNA screening for colorectal cancer from private insurance
    carriers, we believe that obtaining strong reimbursement from payors and a positive coverage decision from CMS for our stool-based DNA screening technology will be among the necessary elements to
    achieving any material commercial success. Despite the positive coverage decision from CIGNA and the state mandates noted above, we do not anticipate material sales relating to ColoSure until strong
    reimbursement is negotiated between LabCorp and CIGNA and between LabCorp and other payors with which it maintains contracts.



            The
    United States Public Services Task Force, or USPSTF, a U.S. government-funded organization that reviews available peer-reviewed published studies to make an assessment of
    the benefits and risks of performing certain medical procedures, completed its 6-year update of its colorectal cancer screening guidelines in October 2008. At that time, the USPSTF, which
    can influence coverage decisions by payors, including CMS, determined that the evidence is insufficient (USPSTF Grade: "I" Statement) to assess the benefits and harms of both stool-based DNA and CT
    colonography, or virtual colonoscopy, as screening modalities for colorectal cancer. The USPSTF gave no score to these two new tests added to the ACS and MSTF-CRC colorectal cancer
    screening guidelines. Many payors base their coverage decisions around colorectal cancer screening on the recommendations of the USPSTF. Accordingly, our future plans may include working to accumulate
    and publish in peer-reviewed journals additional performance data, and patient compliance and
    preference data, that will be useful to the USPSTF, as well as to CMS, in conjunction with our request for reconsideration of our NCD application. We could incur significant time and costs to
    accumulate such additional data, which still may not yield positive results with the USPSTF or CMS. Additionally, despite the fact that our technology is included in the colorectal cancer screening
    guidelines of the ACS and MSTF-CRC, the FDA warning letter we received with respect to the PreGen-Plus testing service may have a similar impact on private third party payors
    in that, like CMS, those payors may defer reimbursement policy decisions with respect to our technology until such time, if ever, as our technologies are cleared by the FDA. Finally, certain members
    of the MSTF-CRC may fail to separately support the position of the MSTF-CRC, which could have a detrimental effect on our commercial and reimbursement efforts related to
    stool-based DNA screening.



            The
    National Committee for Quality Assurance, or NCQA, is a private, not-for-profit organization that, among other tasks, measures the performance of U.S. based
    health care plans. The performance measures quantified by the NCQA result in the Healthcare Effectiveness Data and Information Set, or HEDIS. We believe that HEDIS measures could be a factor used by
    consumers and employers when selecting among alternative healthcare plans in which to enroll. If our stool-based DNA screening technology for colorectal cancer screening is not recognized by NCQA as a
    test that contributes to a health plan's score for the colorectal cancer screening measure, health plans may not reimburse for stool-based DNA testing. Despite being included in the recently updated
    colorectal cancer screening guidelines of the ACS and the MSTF-CRC, there can be no assurance that stool-based DNA screening for colorectal cancer will be adopted by the NCQA as a test
    that contributes to increasing the score of the HEDIS colorectal cancer screening measure. The NCQA is currently reviewing the colorectal cancer screening measure and made its proposed changes
    available for public comment February 17, 2009 through March 17, 2009. The NCQA has determined not to include stool-based DNA screening in the draft 2010 HEDIS measure that will be used
    to evaluate 2009 health plan performance (a retrospective measure that in 2010 "looks back" at 2009 performance). A final 2010 HEDIS measure will be issued sometime after the results of the public
    comment period are analyzed. Such exclusion could materially limit our ability to secure third-party reimbursement and as a result, materially limit our revenues.




44









HREF="#bg46501a_main_toc">Table of Contents





EXCERPTS ON THIS PAGE:

10-K (4 sections)
Mar 31, 2009
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