By Allison Proffitt
July 8, 2013
| In May, Bio-IT World
looked into the challenges associated with CPT codes and new genomic diagnostics from the perspective of researchers (see, “CPT Code Concerns Raise Issues for the Diagnostics Industry
”). But the issues raised were not a surprise. The American Medical Association and McKesson say they are already taking steps to simplify the process.
Earlier this year, the American Medical Association and McKesson launched an agreement they hope will “bring transparency and clarity” to the CPT challenges: they are taking a series of McKesson codes—Z-Code Identifiers—and mapping the Z-Codes to existing CPT codes.
The two groups expect the mapping to be completed and available in the first quarter of 2014.
“The [diagnostics] market has essentially been stuck between innovation and execution,” said Robert Musacchio, SVP for business products and services, American Medical Association. “There’s a lot of innovation going on, but because payers do not have a standard method to identify and to collect data on these tests, the actual execution has been somewhat delayed.”
The problem is shared between labs, payers, and providers, Musacchio said. From AMA’s viewpoint, the challenge is one of balance: “How do we ensure the patients get the right care at the right cost with the minimal amount of administrative burden?”
The AMA-McKesson agreement offers the first steps to a solution: clearly identify which tests are being used, so they can be evaluated for efficacy.
“If you can’t understand what is happening at a granular level, if you can’t know what tests are being done and understand their clinical and financial impact, you’re essentially managing blind,” said Matthew Zubiller, VP of decision management, McKesson Health Solutions.
Identify First, Classify Second
McKesson’s Z-Code Identifiers were originally developed four to five years ago as part of a decision support system that McKesson offers, explained Zubiller. The Z-Code process assigns a unique 5-character identity to each individual test submitted to McKesson’s online registry. Z-Codes—and eventually the map to corresponding CPT codes—are housed online in the McKesson Diagnostics Exchange Test Catalog.
“We created this decision support system to help providers provide the right test, to help payers make sure they’re paying for the right test, and to enable decisions to be made around these diagnostic tests so [all users] can understand—with the right level of granularity—what is the right test to do and to pay for,” said Zubiller.
The current industry anxiety lies in differentiation and discernment, he said. Labs want to differentiate their tests from others and prove clinical utility. Health plans, clinicians, labs and hospitals want to know exactly which test is being performed.
“It’s a pretty painful process right now,” Zubiller admitted, and as the list of genetic testing options grows, the problem is getting worse.
Identifying tests by technique is an issue that concerns genetic testing companies. Whether testing by gene amplification, nucleic acid extraction, or nucleic acid probes, their tests blend in with others assigned to the same CPT code. Zubiller says Z-Codes address that. The thousands of Z-Code Identifiers represent a granularity not reflected in CPT codes, he explained. “If you have a unique method or a unique test—if it’s done differently than another test—then you have a unique identifier. That’s at the very core of it.”
That granularity will help dispel some of the confusion. “I think it may become clearer, more transparent, and more effective if we’re able to deploy this type of solution,” Zubiller said. “The core of this Z-Code and CPT mapping is about being able to provide a foundation to enable better decision making.”
What’s My Number?
Labs, though, still need to come up with two numbers.
“We tried to… combine the best of what McKesson does and the best of what AMA does,” said Musacchio. “We combined the two solutions and created a map between McKesson’s process and the CPT process.”
Ideally, Musacchio said, labs will apply first for a McKesson Z-Code Identifier. Then with that more specific identifier, the lab will enter the CPT editorial process to be mapped to a CPT code.
“The Z-Code [system] is not a HIPAA-designated code set like CPT,” Musacchio pointed out. But moving from the specific Z-Code to the more general CPT code smoothes the process, he believes. “It’s not a requirement to have a Z-Code, it just makes things a lot easier and a lot simpler to process.”
Often many Z-Codes will map to a single CPT code, clarifying which actual test was done, Zubiller said. “When a lab does a test and you have a claim, you can submit the identifier and the CPT code together on the claim.”
Even with both codes, a test isn’t guaranteed reimbursement. Both Zubiller and Musacchio were quick to point out that payers set their own rates. “CPT isn’t a payment system. It’s a reporting system. Others, like insurers or the federal government, will take their pay schedules and link them to CPT,” Musacchio said, “but CPT doesn’t have any input or recommendations into what those payment policies would be.”
A Different Story
Both Zubiller and Musacchio are hopeful that mapping Z-Codes to CPT codes will address some of the pain points of the diagnostic testing industry. Individual tests—including their techniques—will be identified more precisely, so labs should be able to differentiate themselves and their tests. But the issues surrounding whole genome sequencing are “a different story,” Zubiller said.
“We as an industry still need to figure out what’s the best way to evaluate [whole genome testing results],” said Zubiller, “but from our perspective, with whole genome, what you’re essentially doing is you’re creating an inventory of what currently exists within that genome. Then you’re testing against that genome. You’re still doing [individual] tests against that genome. So the question is… which ones are valid and which ones are not. Which ones are useful and which ones are not. Just because you can do a whole genome sequence, and you can do a battery of tests against it, doesn’t mean each of those tests should be done, and should be paid for.”
Incorporating Z-Codes also doesn’t fix interpretation concerns. “The reality is that the gathering of the data is very different from the interpretation of the data,” Zubiller said. “I believe that both of those are two distinct efforts and as the technology progresses, the gathering of the data is going to become more commoditized, and the real value’s going to come in at how you interpret that data to make a good decision.”
However, the Z-Code and CPT mapping will provide a solid foundation on which to build a more values-based model of health care, Zubiller and Musacchio contend.
“If we really want to see and realize the true potential of diagnostic tests… we must embrace what is our unit of measure,” Zubiller challenged. “If we can we get a line around that, be transparent around performing against that, and then be able to pay for value based on that, it becomes a real opportunity to create a huge shift in the way people think about diagnostics that simply won’t happen if you don’t have this type of approach in place.”
He continued: “The end solution is going to be about how you use these tools to get to a point where you are able to actively demonstrate the clinical and financial impact of this test as a lab, and as a payer you can effectively discern that.”