Speaker: Debra G. B. Leonard, MD, PhD, Associate Professor, Pathology and Laboratory Medicine; Director, Molecular Diagnosis and Genotyping Facility, Abramson Cancer Center; Director, Molecular Pathology Laboratory, Department of Pathology and Laboratory Medicine, University of Pennsylvania, Philadelphia, Pennsylvania.

The laboratory at the cancer center is involved in the study of DNA and RNA obtained from patient specimens to manage various diseases. Molecular diagnostics is commonly used to identify infectious diseases, including the human immunodeficiency virus (testing viral loads or genotyping).

Dr. Leonard described the coding system that is used to bill patients for tests performed. Specific CPT or International Classification of Disease (ICD) codes are used for third-party payments. CPT codes describe medical or psychiatric procedures performed by physicians and other health care providers. The Health Care Financing Administration (HCFA) developed the codes to assist in assigning reimbursement amounts to providers by Medicare carriers. Five codes are used for the eventual billing of genetic testing.
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Molecular diagnostic tests can be expensive. The laboratory receives only 13% to 14% of the cost from Medicare.

Commercial diagnostic kits that use one CPT code are available. There are national limits for 14 CPT codes. For hepatitis C testing, the Medicare limit is set at $59, but the average cost is $99.18. Medicare currently reimburses hepatitis C viral load testing at about half the rate of HIV viral load testing even though similar methods are used.

Despite low reimbursements, the work continues to identify and obtain new CPT codes for new methods (e.g., microarray technologies and an expanded CPT coding system for molecular tests), and mechanisms for increasing reimbursement for existing molecular CPT codes to a level more appropriate for the cost of testing are being explored.

The Role of the Specialty Pharmacy in Dispensing Biotechnology Drugs

Speaker: Alan M. Lotvin, MD, President, Specialty Pharmacy Services, Medco Health Solutions, Franklin Lakes, New Jersey.

Specialty pharmacy is a relatively new sector for biotechnology and injectable drug products. Many different types of companies are coming together to develop systems for purchasing, managing, and administering these products. The specialty pharmacy market is currently estimated at $20 billion and is expected to reach $35 billion by 2005, with more than 22 products in 12 disease states on the horizon for that same time period.
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Drugs that are handled by specialty pharmacies are generally expensive and are usually injectable; they are currently available for the treatment of chronic complex diseases such as multiple sclerosis, hepatitis C, cancer, Crohn’s disease, psoriasis, asthma, cystic fibrosis, Fabry’s disease, and rheumatoid arthritis. It has been projected that the specialty pharmacy market will exceed 16% of total U.S. drug spending by 2005. Specialty pharmacy drugs are unique: many are billable under both medical and pharmacy benefits; enhanced patient support services are required; and the average cost is $10,000 to $250,000 per year per patient.

Today, significant and costly gaps exist in the management of specialty pharmacy utilization and expenditures. Implementing a well-designed specialty pharmacy benefit management (PBM) program enables managed care organizations (MCOs) to enhance patient care while effectively managing spending across all distribution channels.

Dr. Lotvin presented a benefit management model consisting of a single-payer point of contact in which the prescription is given to one payer. Specialty drug management allows the drug benefit to be distributed across the pharmacy and medical channels. Management of the distribution channel drives prescription volume to the highest quality and is most cost-effective, eliminating drug waste because the appropriate dosage strength is used for each patient. The management model uses optimized drug selection to allow for better physician and patient communication and uses maximum allowable charge (MAC) pricing by therapeutic category. The model’s design is also enhanced when benefits for plan members are optimized in terms of health and physician management.
The use of specialty pharmacies helps to ensure accuracy in drug dispensing, correct bar coding, and high-quality scanning of pharmacists’ badges for verification in order to provide an environment free of errors.