Genomic diagnostics company Veracyte announced that the Medicare coverage policy for its Percepta Bronchial Genomic Classifier has been finalized by Palmetto, a Medicare Administrative Contractor (MAC). According to Veracyte, the local coverage determination (LCD) makes Percepta—which was developed via the Medicare MolDx program—the first genomic lung cancer screening and diagnostic test to be approved for coverage by Medicare.
The LCD from Palmetto for Percepta, effective March 13, is expected to be the first in a line of coverage determinations for the diagnostic test. The company says CGS Administrators (another MAC) has also issued a final LCD, while Noridian Healthcare Solutions (also a MAC) is finalizing its draft LCD. Once completed, all the LCDs are expected to provide coverage of Percepta available to 37 million of the 57 million Medicare beneficiaries nationwide.
"Palmetto continues to be a leader in acknowledging the tremendous advances in patient care and healthcare savings that are enabled by access to Veracyte's high-value genomic tests," said Bonnie Anderson, Veracyte's chairman of the board, president, and CEO. "The significant clinical evidence supporting Percepta met the MolDx program's high standards for coverage and, we believe, will also be key to gaining private insurance coverage and driving the test's adoption as we begin to ramp up commercialization."
The Percepta classifier is a genomic test that is used to improve the accuracy and safety of lung cancer screening and diagnosis. Last May, Veracyte presented two separate studies at the American Thoracic Society (ATS) International Conference, showing how the test impacted the decision-making of physicians for their patients being evaluated for potentially cancerous lung nodules or lesions. Using patient cases from the two prospective, multicenter studies (AEGIS trials), they found that a "low risk" genomic test result prompted a threefold reduction (from 57% to 18%) in invasive procedure recommendations, compared to when no genomic test results were available.
"When a patient with a suspicious lung nodule is left without answers after a bronchoscopy, physicians often recommend additional invasive testing to reduce the chances of missing a malignancy, even though we know that a significant fraction of the nodules we see are not cancer," said J. Scott Ferguson, M.D., associate professor of pulmonology and critical care at the University of Wisconsin, Madison, and lead author of one study, which appeared in BMC Pulmonary Medicine. "Our findings suggest that physicians will have confidence in the genomic test's results and will direct many of these patients to CT monitoring, rather than invasive procedures that are risky, costly, and often unnecessary."
Currently, an estimated 250,000 patients undergo a bronchoscopy for suspected lung cancer each year, of which 40% produce inconclusive results. These inconclusive results often lead to risky and expensive, invasive procedures such as transthoracic needle biopsy (TTNB) and surgical lung biopsy (SLB). TTNB has a 15% to 25% risk of collapsed lung, and SLBs can cost more than $20,000.
Veracyte estimates the current U.S. market opportunity for Percepta to be $425 million to $525 million and expects the market to increase in size as lung cancer screening programs expand. Approximately 50% of the current market comprises Medicare patients.