CMS Finalizes National Coverage Determination for Next Generation Sequencing Tests

March 20, 2018By Serra J. Schlanger & Jeffrey N. Wasserstein

On March 16, 2018, the Centers for Medicare and Medicaid Services (CMS) finalized a new National Coverage Determination (NCD) for Next Generation Sequencing (NGS) tests.  The granting of the new NCD resulted from the FDA – CMS Parallel Review of Foundation Medicine, Inc.’s FoundationOne CDx™ (F1CDx™) – a NGS-based multi-drug companion diagnostic test that received FDA approval in November 2017.

The new NCD applies to NGS-based diagnostic tests for advanced cancers. These tests are now considered reasonable and necessary and covered nationally when:

  1. Performed in a CLIA-certified laboratory;
  2. Ordered by a treating physician;
  3. The patient has:
    • either recurrent, relapsed, refractory, metastatic, or advanced stages III or IV cancer; and
    • either not been previously tested using the same NGS test for the same primary diagnosis of cancer or repeat testing using the same NGS test only when a new primary cancer diagnosis is made by the treating physician; and
    • decided to seek further cancer treatment (e.g., therapeutic chemotherapy).
  4. The diagnostic laboratory test using NGS has:
    • FDA approval or clearance as a companion in vitro diagnostic; and
    • an FDA approved or cleared indication for use in that patient’s cancer; and
    • results provided to the treating physician for management of the patient using a report template to specify treatment options.

The new NCD allows for national coverage of the F1CDx™ test as well as any other NGS-based companion diagnostic tests for cancer that are approved by FDA. The NCD Decision Summary notes that there are currently four specific FDA-approved companion diagnostic tests using NGS (the F1CDx™, the FoundationFocus™ CDxBRCA, the Oncomine™ Dx Target Test, and the Praxis™ Extended RAS Panel).  The NCD allows for coverage of FDA approved or cleared NGS-based companion diagnostic tests for cancer that are performed at any CLIA-certified laboratory, including academic medical centers and community hospitals.  The new NCD does not provide coverage for cancer screening tests or for complementary diagnostic tests.  Similarly, it does not provide coverage for NGS-testing for non-cancer conditions.

The requirement that the diagnostic test has FDA approval or clearance essentially precludes automatic national coverage of laboratory developed tests (LDTs) that utilize NGS. CMS stated that coverage determinations for other diagnostic laboratory tests that utilized NGS for cancer will be left to the local Medicare Administrative Contractors (MACs).  MACs that choose to cover LDTs and other diagnostic laboratory tests that utilize NGS for cancer must follow the other three criteria for coverage (e.g., CLIA-certified laboratory, physician ordered test; patient criteria).

This coverage determination demonstrates a distinct preference by CMS for FDA approved or cleared tests. Even though some of the public comments provided examples of LDTs that are as sensitive and specific as FDA-approved tests, in finalizing the new NCD, CMS explained that “FDA approval or clearance demonstrates analytical and clinical validity[.]”  While FDA has not taken recent action to increase its regulation of LDTs, this NCD may be viewed as a small push for LDT developers to seek approval or clearance from FDA in order to receive Medicare coverage.