Cable Car Presentation At The Clinical Lab Fee Schedule Public Meeting by Cable Car Capital

Disclosure: Short EXAS.

On Thursday, July 16, I presented Cable Car’s reconsideration request regarding code G0464 on the Clinical Lab Fee Schedule before the annual Public Meeting at CMS. The slide presentation is now available for download. You can view my prepared remarks and those of the other speakers on Youtube [starts at 24:45] or in the player embedded below.

I will publish a further comment and rebuttal to Kevin Conroy’s presentation after the public comment window ends in August.

I appreciate having had the opportunity to share my perspective with CMS.

Cable Car Capital CLFS Reconsideration Presentation

Cable Car Capital

What is Cable Car Capital?

  • Cable Car Capital LLC is a San Francisco-based investment adviser founded in 2013 and managed by Jacob Ma-Weaver, CFA
  • Cable Car implements a concentrated, hedged value investing strategy through separately managed accounts
  • Not here to attack test sponsor. Support improved CRC screening but believe lower payment rate is in the public interest.

Who is Jacob Ma-Weaver?

Qualifications

  • MA in Statistics from Columbia University
  • CFA charterholder
  • Experienced healthcare investor and portfolio manager
  • Studied CRC screening modalities in detail since 2012

Biases

  • Short position in Exact Sciences
  • Reimbursement for new tests should be cost-effective

Recommended crosswalk: 81401+82274

  • Cable Car recommends a crosswalk based on similarities in test purpose, not just method
  • CY2015 crosswalk included payment for KRAS, a diagnostic test not intended for screening
  • Proposed CY2016 crosswalk is to 81401 methylation analysis + 82274 fecal immunochemical test for hemoglobin (FIT)
  • G0464 would retain the highest payment level for any non-invasive CRC screening test

Code G0464’s purpose is CRC screening

  • G0464 covers Cologuard, a stool-based DNA and fecal occult hemoglobin assay intended for colorectal cancer (CRC) population health screening. Cologuard is not a diagnostic test.
  • Cologuard was the first test approved by the FDA and CMS under Parallel Review
  • In public comments, Cable Car supported CMS coverage but argued that the reimbursement amount is too high for a screening test

DeeP-C did not demonstrate value of DNA

  • Cologuard FIT component alone outperforms competing commercial FIT
  • Cologuard sensitivity would be only ~80% at specificity level of commercial FIT
  • DeeP-C provided insufficient evidence that DNA components improve CRC detection over FIT component alone
  • Curve represents “probability that a randomly selected CRC patient has a test value greater than a randomly selected non-CRC patient”
  • AUC was significantly greater for Cologuard than competing FIT (p = 0.0496), significantly greater for Cologuard FIT alone than competing FIT (p = 0.0292), but not significantly greater for Cologuard than Cologuard’s FIT component (p=0.5507)
  • Cologuard had a modest benefit over its FIT component alone for pre-cancerous neoplasia (which do not bleed)
  • Sensitivity to pre-cancers was <50%, which does not justify population screening using expensive DNA tests

Cable Car Capital

See full slides below.