The resolution of the budget impasse between Democrats and Republicans on Capitol Hill sidestepped a number of problems, including some cuts to Medicare payment rates for clinical laboratory testing services. However, that pause is only in effect through the end of January 2026, leaving operators of these labs with a fiscal sword of Damocles to manage.
The U.S. FDA famously lost a lawsuit over its final rule for regulation of lab-developed tests (LDTs), but Jeff Shapiro of King & Spalding told BioWorld that the implications of this decision go beyond FDA regulation of clinical lab operations.
The U.S. FDA draft guidance for enforcement of in vitro diagnostics for emergent threats without a public health emergency has proposed some significant restrictions, which drew several negative responses.
The American Clinical Laboratory Association has followed through on its promise to file suit against the U.S. FDA over the agency’s final rule for lab-developed tests. The lawsuit will be heard in the U.S. District Court for the Eastern District of Texas, which is also the venue for litigation against another federal government agency, the Federal Trade Commission, suggesting that litigants expect a favorable review of their case in this court.
Medicare coverage of medical software in the U.S. is generally not the subject of flattering remarks from industry, but the novelty of the subcategory of artificial intelligence (AI) would seem to suggest that the Medicare problem for AI is even more severe. That suspicion was borne out by consultant Bruce Quinn who said at a public meeting here in Washington that some areas of software coverage and reimbursement, including AI software, “are just a train wreck,” a problem he said is especially acute in fee-for-service care.
The question of the U.S. FDA’s statutory authority to regulate lab-developed tests (LDTs) is still percolating, and the FDA and the Centers for Medicare & Medicaid Services (CMS) have issued a joint statement that takes aim at that very question.
The controversy over U.S. Medicare coverage of breakthrough devices is far from over as an administrative matter, but the House of Representatives is prepared to statutorily force the issue with a new bill that enjoys bipartisan support. The Ensuring Patient Access to Critical Breakthrough Products Act of 2023 provides instant Medicare coverage upon FDA clearance or approval of the device, a feature of previous policy proposals that the CMS has found administratively problematic.
Test developers who are seeking coverage by public and private payers often resort to clinical practice guidelines as support for their pleas for coverage, but payers aren’t always persuaded by these guidelines. Lon Castle of Evicore Health told test makers that while these guidelines are often helpful, many of them are well ahead of the evidence, and that test developers would do well to check the data behind the guidelines before reciting them to payers.
The question of the U.S. FDA’s authority to regulate lab-developed tests (LDTs) has been percolating for more than a decade, but the recent failure of Congress to pass legislation granting the agency explicit authority to do so is seen in some quarters as a missed opportunity. The FDA’s Elizabeth Hillebrenner said that while the agency would prefer to regulate LDTs under new statutory authorities, the agency sees a public health problem with the current state of affairs, and thus, “we are moving forward with rulemaking.”
The Biden administration sees the $15.6 billion just provided by Congress as inadequate funding for the pandemic, particularly given the administration’s new test-to-treat initiative, and will continue to press Congress for the remaining $6.9 billion requested by the White House, said Tom Inglesby, senior advisor for the White House COVID response team, at the American Clinical Laboratory Association annual meeting.
