When a major medical diagnostics manufacturer needed help with an unfair competition issue, it called on Compass Strategies to help resolve the situation.
Alere sells a diagnostic point of care diagnostic device that is both more sensitive and less costly than its' lab based competitor. Yet the manufacturer of the competing diagnostic test marketed its device to physicians based on the higher reimbursement rates that could be obtained through manipulating CPT reimbursement codes.
Compass evaluated Alere's position and developed a strategy to resolve the problem. First, Compass recommended that Alere contact private payers in an effort to encourage the payers to review coverage of the competing diagnostic lab test. Second, Compass arranged for meetings with the Center for Medicare and Medicaid Services (CMS), the Medicare Payment Advisory Commission (MedPAC), select Members of Congress and the investigative counsel for the United States Senate Finance Committee.
The end results?
1. CMS issued new CPT codes for the competitor's test and cut reimbursement for the test by 50%.
2. A number of private payers adopted coverage policies limiting the use of the competitor's lab based test. One private payer went so far as to issue a statement of non-coverage for competing test, classifying it as experimental.
3. CMS opened a program integrity investigation into the possible abuse that was occurring relative to competitor's CPT code manipulation.