 I feel I'm here a little bit under false pretenses in a session that's entitled science and gaps but I'll do my best to be at least the modestly entertaining although I'm really depending on Mark to to carry the day. So I'm going to talk about into the lion's den my experience with third-party payers and molecular diagnostics something that I had really very little to do until a little over a year ago when I became a volunteer faculty UCSF and became CMO at Envite. So disclaimer disclosures I am a full-time employee and I get salary and stock options from this company and the opinions I express here are based on my own experience they're my own and they don't necessarily reflect those in Envite. I'm always interested in the following issue which is anecdotes as data. You can actually find both comments the plural of anecdote is data that was Raymond Wolfinger at Stanford Graduate Seminar in 1969 or the plural of anecdote is not data and that's a Bernstein metaphor cognitive belief in science paper that he published so take your pick but as of today I'm going to go on the left which is the plural of anecdotes data I'm going to tell you some anecdotes. So the first is the third-party payers are not monolithic and each payer creates its own policies and this has to be spread out among a number of different payers. I was spending a lot of time recently with Medicare but there are also large private payers as you know United Healthcare and Aetna. There are many blues large and small some were acquired and therefore belong to a larger umbrella blue but still retain some autonomy some are independent and you really have to deal with each of them on an individual basis then of course there's state Medicaid there's managed Medicaid there's the federal blues and it goes on and on so there's lots of different lots of different payers and they are very heterogeneous in their outlook on genetics on their knowledge and sophistication. So moldy X which is a very important component of this is a process that was set up and it's an organization it's a group that was set up originally about Palmetto which is one of the max one of the Medicare contractors and moldy X has been very much involved in evaluating genetic testing and making decisions about whether or not there is evidence that would make it reasonable to support diagnostic testing but moldy X doesn't dictate the most insurers but it does wield a lot of influence sort of like the Pied Piper here. So when it comes to molecular genetic testing most payers do play follow the leader with moldy X was moldy X do it reviews evidence concerning whether the coverage in a test is directed by Dr. Elaine Jeter who is a very knowledgeable person acknowledged in the field as as being an expert in this area but it's I find it sort of interesting that to have almost a single group like moldy X and even a single individual in that group to be so to so strongly personify what we view as being a sort of a national a national issue and it moldy X grew out of the work of Palmetto GBA which is a subsidiary of Blue Cross Blue Shield but it's also the Medicare administrative contractor in the southeast U.S. So when it comes to them most payers do follow the leader Noridian with another Mac took over the jurisdiction on the West Coast where I am California Nevada Hawaii Pacific Territories and Noridian tends to be a very close follower of what moldy X does other Macs also look there but they make their own local coverage decisions and so it's not necessarily a completely snap thing and many private insurers also look to moldy X for guidance but as I'm sure you're aware and it's an important point to make Medicare only covers affected individuals and not unaffected individuals at risk. So a lot of what we think about in the use of genomics for risk assessment for cascade testing in a family in addition of course to the age or disability requirements to be covered by Medicare you also also have to be affected and so no matter how good a job something like moldy X does it's still not going to cover the people that we are also interested in thinking about and that is unaffected people who are at risk. So for example when moldy X just recently looked at and approved a new for payment a new code for hereditary breast and ovarian cancer done as a panel by next generation sequencing as opposed to the previous coverage which was for a different methodology they looked we applied for our company we applied for Medicare coverage for this which was accepted and they asked us to submit a lot of analytical validity data they wanted to know that the next generation sequencing approach was going to work and was going to be equal or better than what have been done previously they wanted to know what the clinical interpretation of the data was and whether our lab had reasonable concordance with other laboratories and of course they wanted to know if we used ClinVar was an important component of what they looked at and they also wanted clinical utility information most of which has been published by a combination of some academic laboratories but some of it has also come from commercial laboratories in particular one myriad which had had the patent and the exclusive testing rights for a number of years and generated a fair amount of data on that one could use for clinical utility arguments and then when they put that all together decided they were going to do it they then had to put together some sort of a price and the price that they put for next generation sequencing for hereditary breast and ovarian cancer panel which they said had to include at least BRCA one and two but didn't specify how many other additional although genes although those genes had to be relevant to the problem and they priced it at $622 while continuing to pay for the on the old BRCA one and two code well over $2,000 and this is I think an interesting situation where you it's very difficult to find out exactly what the basis was for them setting the what I think most people would recognize as a fairly low price for the next generation sequencing approach to this and this still a preliminary price has not been formalized it's not finalized and likelihood is is that it's going to change but I just found this a very interesting experience to be working with this one designated component of one designated Mac and yet it will turn out to be probably the most influential and important contributor to the use of of next generation sequencing pay payments by Medicare and probably by a number of other payers as well if you do the testing by next generation sequencing. So the the other thing I've learned in working with insurers is that there's a very complex dynamic among the concerned parties between patients and providers on one hand payers on the other hand and the laboratory which is the rope there that's getting stretched in both directions. So the patients and providers they are driven very heavily by personal utility concerns you know as a practicing physician myself I don't always necessarily order a test just because I'm absolutely convinced that it has a total perfect beautiful clinical utility also sometimes I order a test because I'm trying to confirm a diagnosis or I'm just trying to understand and to be able to explain to a patient better why that patient may or may or may not have a particular condition without there being a clear alteration in management that's going to happen as a result of that test and patients certainly often feel the same way and they're looking to get their tests paid for by their insurance whereas the payers are driven by much I think much stricter clinical utility concerns as was said this morning they often repeated that they did not take economic issues as being the overriding concern they really are trying to provide good clinical care for the people that they cover but they do want good evidence such as clinical utility also many of the provide of the payers expressed a strong interest in some kind of utilization management similar to what has been done for drug treatment they also would like for genetic testing and often would engage with us about whether the laboratory could partner with them in some way to provide some sort of utilization management to make sure because they're quite concerned that many providers are ordering the wrong tests they're ordering tests inappropriately they're overusing tests they're misinterpreting tests and they would love it if somebody who had more knowledge and sophistication that they felt that they had would be able to partner with them to help them in managing the utilization of genetic tests and if they're also expressed a lot of concern about downstream costs I know this was mentioned this morning a couple of times in this afternoon as well that that the inappropriate interpretation of tests for example the extrapolation from variants on certain significance the expansion to very large panels with the number of genes that work that they considered irrelevant to the condition for which the patient was being tested that that would could own inevitably lead to excessive downstream testing which could potentially not only cost a lot of money but also be harmful to the patients and the laboratory wants to keep his lights on it certainly wants to get into contract with payers this is very helpful and the lab also has customers those customers are the providers and the patients and they want to keep them happy and so the lab is is is is working hard to try to be a partner with the payers but at the same time serve the needs of and keeping the patients number one and the providers that are ordering these tests number two at the top of their list of the people that they're really trying to pay attention to and take care of it because and insurers have a brief their previous experience with testing colors you know the others that there's that old expression about how the generals are always fighting the last war and I really felt that payers have been struggling with their previous experiences with genetic testing number one was they've just staggered under code stacking where their their laboratories that would generate stack codes for genetic testing that could go up into the tens of thousands of dollars for a test that really should only cost under a thousand dollars and that this is something that they really feel that they got burned they also feel they got burned badly by a lot of the toxicology issues that ever risen recently there's been a big boom of having in office tech toxicology testing which would then be which which would then be billed to third party payers and there's a whole cottage industry to develop for example you treat patients we take care of toxicology for you they are providers of a compliant turnkey in office lab for clinical toxicology in specialty practices they'll come in and install a toxicology lab in your lab and I think the many of the insurance companies have really felt that this has been a real problem for them with just escalating costs for drug testing it becomes even more complex dynamic when you now add drug companies as the fourth component of this tug-of-war and for example I've had some recent experience talking about LDL receptor mutation testing for hyperclesterolemia and the PCS K9 inhibitors which are new and powerful and expensive medications where the patients and the providers were looking to get their test paid for and express some resentment with the idea that a laboratory might quote side with the payers who are asking the laboratories to use genetic testing to limit who gets approved to get an expensive drug while the drug companies were not necessarily interested in having genetic testing that would limit the prescription of an expensive drug and so the payers and the drug companies are at odds and they're both trying to get the laboratory to side with them to either work to do the testing or not work to do the testing and meanwhile with the patients and the providers sort of saying look you know whose side are you on anyway so in summary I think obtaining third-party payer coverage for genetic testing is a chaotic and fragmented process some pairs understand the field others are clueless there's a theoretical bar of showing true clinical utility for the individual patient but this bar is arbitrarily and haphazardly applied or disregarded by different pairs I can tell you over again over and over again that there are many examples of tests that are done and sent to insurance companies and paid for even though those insurance companies have in their official documentation that this is not a test that they will reimburse for and yet they do sometimes and sometimes not and you can't predict when it's going to happen many payers are fighting the last war they're worrying about panel testing because of code stacking in the past even though there are most laboratories now have very very large panels and don't add additional costs if you add additional genes and the utilization management is a mantra for many payers but its implementation is very rigid is bureaucratic and it contributes unnecessarily to increased health cost health care costs mean our our prediction is that the cost of a test doubles or triples when a payer insists upon having stacks of documentation which they could actually save administrative costs by simply accepting a much lower cost for the testing don't demand all the administrative documentation and then for example did some sort of audit afterwards to determine whether in fact the laboratory was charging for what are medically appropriate testing so I think this entire idea that one is going to require lots and lots of clinical data in order to justify testing as the cost of testing comes down is going to become more and more more and more are really archaic and unnecessary in its view so we'll see what happens with that so the last thing I just want to say is that there are a couple real standout third-party payer efforts to try to really understand genetic testing and make it accessible to others you know there's something called evidence street from blue cross blue shield which is a proprietary database of evidence which is really really quite interesting what they tried to do and of course there's the blue cross tech assessment group which also I think has been very very tough very hard nose but also very evidence-based and so I think there are efforts but it is very variable in its applicability that I'm going to stop I think I may have taken up to mark thank you Bob next we have mark Williams and guys enter