Advantages in Developing a MDx Lab

1. Advantages in Developing a MDx Lab RCM Enterprise Services Mark Droste

2. Brief History For decades Genetic testing was associated with Universities, and Reference Labs focused on rapid DNA sequencing. DNA sequencing provided the groundwork for the molecular diagnostics market that focuses on Personalized Medicine Sequencing has evolved to be incredibility useful by providing an optimal approach in the areas of preventive and therapeutic patient care.

3. Genetic Testing Genetics Genetic testing analyzes the individual’s genetic characteristics….these are the traits you inherit from your parents. The chromosomes act as carriers of the genetic material. Abnormalities in the chromosomes number or structure and can result in disease: • Cystic Fibrosis • Sickle Cell Anemia • Huntington's Disease • Down syndrome

4. Types of Genetic Testing Reproductive (NIPT) Noninvasive Prenatal Testing Infectious Disease Facilitates determining the susceptibility to particular microbes and the course of infection. Oncology Cancer is a genetic disease caused by changes in genes that control the way our cells function Pharmacogenomics The study of how genes affect a person's response to drugs

5. Molecular in Facilities • Type of Facility

6. Influences Driving Molecular Development • Reimbursement Resolution • Development and success of the molecular diagnostics market will require: • A focused effort in the resolution of reimbursement issues • Acceptable descriptive CPT codes

7. Influences Driving Molecular Development • Clear FDA Guidance • Ongoing guidance from the Food and Drug Administration (FDA) regarding definitions for: • Research Use Only • Laboratory Developed Tests • Analyze Specific Reagents

8. Influences Driving Molecular Development • Pharmacogenomics • Ongoing interaction between pharmaceutical companies and molecular diagnostics manufacturers is key to developing new assays. • This communication will aid in determining whether a given patient qualifies for a particular drug.

9. Influences Driving Molecular Development Point-of-Care Testing Continued incremental improvements in the molecular diagnostics devices used for point-of-care testing shortens the result wait times. End result A clinically useful result in minutes to several hours instead of…. half a day or 24 hours. 

10. Who Needs Molecular Diagnostics? • Cancer clinics • NICU • Children Hospitals • Pharmacogenomics • Hospitals

11. Technology is Driving the Molecular Industry Advantages in Adoption of MDx Molecular diagnostics has progressed the last 15 years. No longer restricted to academic or reference laboratory settings. Organization embracing molecular are enjoying: Fast turnaround times Improved sensitivities Increased accuracy Costs savings from not sending out samples

12. Technology is Driving the Molecular Industry Disadvantages of not Adopting MDx Organizations who have not adapted due to the challenges and expense of opening a molecular lab are not on an equal footing in the marketplace. These new techniques have significantly improved the detection of: Genetic disorders Multiple viral and bacterial infections

13. Why Perform Molecular Testing In-House? • Accessibility • With recent improvements in the industry, developing a molecular lab is much more straightforward than it previously was in the past. • Improvements in instrumentation • Simplified testing profiles • Automated testing platforms driving quality results • Streamlined workflow focused on creating efficiencies

14. Why Perform Molecular Testing In-House? Clinical Demand Healthcare continues to drive efficiency incorporating standards of care for specific diseases. Vendors in the laboratory market are looking to fill this need with increased automation and molecular diagnostics to improve lab productivity. This improvement includes automated, user-friendly techniques, combined with enhanced sample preparation, analysis, and data evaluation rolled into one.

15. Why Perform Molecular Testing In-House? • Cost-effective • The annual reference laboratory budget will increase up to 15% with MDx testing with increased demand. Combined with 2 to 4 day turnaround time is not in the best interest of patient care. • Expedited results are required in order to provide exceptional patient care: • VZV infections in pediatrics • MRSA screening prior to a surgical procedure • CMV quantification in transplant patients

16. Why Perform Molecular Testing In-House? • Faster diagnostic process • The molecular lab of today can prosper from: • Expedited techniques that diagnose disease conditions and medical disorders quickly • A reliable tool for rapid therapy decisions • Accurate expeditious results can lead to improved treatment of patient care and lead to a decreased length of hospital stays

17. Why Perform Molecular Testing In-House? Managing your data Genome sequencing produces thousands of variants however a relatively minuscule percentage of those are of any diagnostic value. A scalable in-house system needs to provide a smart workflow methodology of filtering, identifying variants, collecting the sequencing and presenting the generated data in an organized approach

18. Potential Revenue Reimbursement Cost per test Genetic testing costs range from: $100 to more than $2,000 Nature and complexity of the test will dictate price. The cost increases if: More than one test is necessary If multiple family members are required Note: newborn screening, costs vary by state

19. Molecular Billing & Reimbursement • Revenue Cycle Complexity • Genetics represents a rapidly growing field for laboratories. This growth brings significant challenges for: • Preauthorization • Molecular coding • Billing • Denial Follow-up • Reimbursement

20. Revenue Cycle Complexity CMS reviews yearly which genes are tested the most and rewrites CPT codes to address the top gene tests. Along with frequent coding changes, some codes may cover up to 10 genes. To ensure proper payments for services rendered it is imperative for laboratories to stay on top of the sometimes daily coding and billing updates that come from CMS and commercial insurance carriers. Molecular Billing & Reimbursement

21. Market Analysis • Before starting a Molecular Lab…. • Know your Market • Before embarking on opening a molecular lab, you should generate some critical questions: • Does my community need a molecular lab? • Which tests does my patient population need most? • How can we be profitable? • Who is our competition?

22. Market Analysis • Before starting a Molecular Lab…. • Conduct a Survey • An excellent method to assess market requirements is to interview the potential clients that would benefit from a molecular lab. • Recommendation: conduct interviews with a selective sampling of administrators, directors, lab managers, tech support, and clinicians.

23. Molecular Billing & Reimbursement • Before starting a Molecular Lab…. • Perform a S.W.O.T Analysis • Strength • Weaknesses • Opportunities • Threats • A recommended method is to itemize on paper and to see what you have going for your organization and what challenges are in your market space

24. Molecular Billing & Reimbursement • Before starting a Molecular Lab…. • Access and Reports • A comprehensive market assessment should aid in understanding the opportunities, revenue potential, and your ability to make it happen. • This method should act as a preliminary proposal that will assist in determining whether the project moves forward or not based on the assessment.

25. Pulling It All Together Hospital labs looking to start or scale an MDx program must begin by establishing these three critical components of laboratory informatics: A LIMS designed to handle the complexity of molecular testing An intuitive, expanding knowledge base for rapid filtration and annotation of relevant variants Straightforward, accessible reporting to translate results into clear, clinically actionable information

26. Pulling It All Together • How do you make your case to key stakeholders? • Making a case for critical stakeholders • Establish a steering committee • Write a business plan • Create a Presentation • Create an ROI • Quoting the lyrics of an 80’ band • “Should I stay or should I go now”…when it comes to pulling the trigger on MDx testing