Medicare Slashes Reimbursement for BRCA Gene Testing
The Centers for Medicare & Medicaid Services (CMS) has slashed the reimbursement rate for BRCA testing by nearly half, beginning January 1, 2014. Medicare will now pay a maximum of $1440 to test for mutations in the BRCA1 andBRCA2 genes, which is about a 49% reduction from the $2795 reimbursement rate it paid in 2013.
The Medicare reimbursement cuts follow a lengthy and contentious court battle over patent rights to the BRCA genes, which culminated in a final Supreme Court ruling last June. In that highly anticipated decision, the Court effectively invalidatedthe patents held by Myriad Genetics for the BRCA1 and BRCA2genes.
The ruling ended Myriad's monopoly over this test, and other companies began to offer testing for BRCA mutations, at a much lower cost than the approximately $4000 Myriad was charging.
According to regulatory filings, Myriad now charges a list price of $3340 for its most comprehensive BRCA test, although the amount may vary depending on discounts that can be negotiated by individual insurers.
On its Web site, CMS notes that as competitors entered the market, prices for the test now range from approximately $900 to $2900.
Despite the competition, Myriad is still the largest provider ofBRCA gene testing and, thus, will be most affected by these reimbursement cuts. Stock shares have fallen for the company since CMS first announced the cuts in November. In addition, Myriad is involved in litigation with 2 other companies that began offering less expensive testing after the Supreme Court decision. The lawsuit is focused on patents that were not affected by the Court ruling and that Myriad believes are being violated.
However, it is possible that these may not be the final reimbursement rates. CMS is providing an additional opportunity to collect comments from both Medicare contractors and the public until January 27. If any revisions are made to the pricing of these tests, the revisions will be effective prospectively, from April 1.