May 2012 Edition Vol.0, Issue 0

Diagnostic Testing and Clinical Pathways Move into the PA Neighborhood

Diagnostic Testing and Clinical Pathways Move Into the PA Neighborhood

By Lee Goldberg, Senior Manager, Syndicated Research

Essentially, prior authorizations (PAs)—the most common cancer management tool—are nothing more than empty vehicles, blank pages that payers can fill with whatever they please. Currently, payers rely mostly on FDA labeling and NCCN guidelines (both offset by state coverage mandates) to determine their appropriate use policies. But, as the giant boulder was to Sisyphus, oncology spend control is to payers. Try as they might with current PA policy, reduced ASP reimbursement, and patient coinsurance, payers just can’t keep costs from rolling out of control.

Payers are beyond doing more of the same things they’re doing already. Of necessity, they need to integrate new control techniques into their prior authorization structures—most notably diagnostics and pathways—to bend the cost curve. How much these newer techniques stem the cost tide remains open for debate.

Looking first at diagnostics, payers indicate that they are dedicating increasingly more attention to oncology diagnostic products, and are anticipating significant increases in management attention over the next two years (Figure 1).

This attention makes sense given the development pipeline of both drugs and independent diagnostic tests. By rights, payers should welcome new agents like Zelboraf and Xalkori; with indications tied directly to diagnostic tests, utilization management becomes straightforward, easy-to-understand, and defensible (Figure 2).

Upon closer inspection, however, the realized benefits of diagnostic tests may not be so clear. First, not all payer policies require tests be completed and even those that do may not require results be submitted (Figure 3).

This seeming gap in policy spares plans the administrative burden of writing new policy or having to review test results. Rather, plans rely on oncologists to hew to label testing recommendations (which they do anyway over 90% of the time). Second, but more troubling, the tests themselves are not infallible. Debates around the validity of results delivered by IHC, Oncotype Dx, and BRCA introduce doubts as to how much weight payers should place on diagnostics in informing their coverage policy decisions in the first place.

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