Biotech Values

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Related to NEO's upcoming earnings announcement:
Forbes Tells the World How Medicare Bollixed Molecular Diagnostic Test Payments, Leaving Nation’s Clinical Laboratories Unpaid for Months

http://www.darkdaily.com/forbes-tells-the-world-how-medicare-bollixed-molecular-diagnostic-test-payments-leaving-nations-clinical-laboratories-unpaid-for-months-421#axzz2RIVfDhrq

Since the beginning of the year, most Medicare contractors and private health insurers have not paid clinical laboratories and anatomic pathology practices for molecular diagnostic test claims coded to the 114 new molecular test CPT codes.

This unprecedented situation of labs going unpaid for more than three months has created financial turmoil and uncertainty across the medical laboratory profession. In fact, the question must be asked: Did Forbes columnist Scott Gottlieb, M.D., wake up the nation’s Medicare contractors with his column published on March 27?

In his essay, Gottlieb wrote “This is a story of bureaucratic mismanagement at the Centers for Medicare & Medicaid Services [CMS], and the harm it’s visiting on the diagnostic testing industry.” Within days of his reporting on the molecular diagnostic test payment stoppage at Medicare, individual Medicare contractors began publishing prices for some or all of these 114 molecular test codes.

Once Medicare contractors issue prices for these molecular CPT codes, clinical laboratory billing and coding experts said checks could be mailed. These checks could go out by the end of this month. But, according to Gottlieb, there is uncertainty about even that scenario.

“Some contractors have not priced anything, such as the Medicare contractor for the market covering Florida,” observed Gottlieb. “That means diagnostic labs located in markets like Florida aren’t getting paid at all… There’s no clear deadline on when this will all get resolved. There’s some speculation that when the Medicare contractors submit their 2013 pricing on April 30, they’ll have to declare their prices for these various molecular tests. Once they do, the labs should get paid retroactively. But the April 30 deadline seems soft. This could linger much longer.”

At this time most clinical laboratories are not being paid for molecular tests. This is probably the most under-reported story in the medical laboratory industry. For that reason, our sister publication, The Dark Report, devoted its latest issue (dated April 15, 2013) entirely to this important topic.

Gottlieb is knowledgeable about the Medicare program. He has served as Senior Adviser to the Administrator of Medicare and Medicaid Services, where, according to Politico, “he supported the agency’s policy work on quality improvement and coverage and payment decision-making, particularly related to new medical technologies.”

This is not good news for any genetics testing labs and means that cash flow, at the very least, will be impaired for Q1. I have lightened my position in NEO based upon this and will await the CC to hear what they have to say and may look for a lower re-entry price.

aj