Filing a complaint with the Louisville division of the District Court for the Western District of Kentucky, Exact Sciences seeks payment from Humana for at least 4,664 Cologuard tests as well as coverage for the procedure in the commercial plans offered in mandate states
Citing more than $800,000 in unpaid service fees and damages, the Exact v Humana lawsuit is the latest example of the on-going struggle between health insurers and clinical laboratories offering proprietary and patent-protected lab procedures.
Exact Sciences Corp. (NASDAQ: EXAS), and Exact Sciences Laboratories, LLC (Exact) allege that Humana (NYSE: HUM) has denied 120 claims in Kentucky worth approximately $70,000 as well as 293 additional claims in other states with coverage mandates worth approximately $169,000.
Exact claims that attempts to appeal denied claims resulted in payment for some services but that more than half remain rejected. They also report roughly 350 claims in which Humana underpaid.
They are seeking full payment for all claims made since the start of 2014 in Kentucky, Georgia, Missouri, North Carolina, Texas, Illinois, Nevada, and Oklahoma.
Humana Flyer Claims Cologuard Medical Laboratory Test Not Covered
Another claim of the lawsuit centers around a flyer distributed by Humana. In the lawsuit, Exact describes a flyer circulated to Kentucky physicians questioning the effectiveness of Cologuard, a noninvasive stool DNA test for colorectal cancer screening that received FDA approval in 2014. Exact alleges that the flyer stated, “Cologuard is not covered under Humana’s commercial plans,” and that the flyer might have been issued nationwide.
In response to a cease and desist notice issued January 21, 2016, Humana claims the flyer was not distributed outside of Kentucky and that any miscommunication was unintentional. According to the lawsuit, Humana ceased using the mentioned version of the flyer, and agreed to reprocess any claims denied since January 1, 2016. However, Exact maintains that many of these claims remain wrongfully denied.
Exact Sciences Conducted Deep-C Study on 10,000 Participants
As a non-invasive, stool-based DNA test, the Cologuard test received approval and national coverage determination (NCD) from both the Federal Drug Administration (FDA) and the Centers for Medicare & Medicaid Services (CMS). Stool DNA testing is also recommended by the American Cancer Society.
In the Exact Sciences’ 2014 DeeP-C study, published in the New England Journal of Medicine (NEJM), Exact used Cologuard to analyze the stool of 10,000 participants. The process identified 92% of cancers and 42% of precancers while maintaining 87% specificity. The study also produced false positive rate of 13%.
Stool DNA Testing Received “I” Rating from Preventative Services Task Force
In 2008, the US Preventative Services Task Force (USPSTF) assigned an “I” rating to stool DNA testing, which is at the bottom of the USPSTF’s Grade Definitions Chart. It means that “The USPSTF concludes that the current evidence is insufficient to assess the balance of benefits and harms of the service. Evidence is lacking, of poor quality, or conflicting, and the balance of benefits and harms cannot be determined.”
In other words, the USPSTF concluded that the evidence did not provide enough information about the test to create a balanced view of risks and benefits of the procedure. In their Final Recommendations Statement, the Task Force noted that stool-based DNA tests like Cologuard offer lower specificity and sensitivity than Fecal Immunochemical Tests (FITs), colonoscopy, and flexible sigmoidoscopy.
One concern is that lower specificity and sensitivity could result in false positives, which would increase the number of unnecessary colonoscopies performed in an effort to verify results, which, in turn, could increase the risk of adverse events, when compared to currently recommended standards for colorectal cancer screening.
This is important to the Exact v Humana lawsuit, which alleges Humana denied claims based on the “experimental or investigational” nature of Cologuard. While the Affordable Care Act (ACA) requires insurance companies to cover any preventative services with an “A” or “B” rating from the USPSTF, this does not immediately exclude other services. Exact argues that the study results and ratings from official organizations provides evidence that Cologuard is neither experimental or investigational.
Neither party has commented publically on the lawsuit, though both have presented subjective arguments to fit both sides of the case.
Precedents for Genetic Testing on the Horizon
Anya Prince, JD, is a post-doctoral Research Fellow at the University of North Carolina (UNC) Center for Genomics and Society in the Department of Social Medicine at UNC-Chapel Hill School of Medicine, and an adjunct professor at University of North Carolina School of Law. In the GenomeWeb article, Prince discussed the conflicting nature of prevention, regulation, and minimizing costs for payers. She stated that “[guidelines] are written based on the medical evidence and often are written quite broadly to encourage people to get screening. What this case shows is [the] disconnect between really wanting specificity for insurance reimbursement and the laws that reference these broader recommendations,” Prince concluded.
Health insurance companies must consider the most cost-effective ways of implementing coverage for emerging technologies. In the case of genetic testing—a field often running on the edge of innovation—obtaining coverage for new tests and procedures is a difficult and lengthy process. Should the lawsuit go to trial, the results are likely to establish a trend in favor of the industry of the winning party.