Piper Jaffray Weighs In After CMS Published Preliminary Gap Fill Rates for NGS Panels (DGX) (ILMN) (LH) (GHDX) (QGEN)

Piper Jaffray analyst William Quirk weighed in on Medical Diagnostics after the CMS published preliminary gap fill rates for NGS panels well below current reimbursement.

Quirk notes while whole genome/exome panels were in-line (i.e. not priced), median pricing for 5-50 gene cancer panels was $90 (vs. ~$2,564 with gene stack pricing); >50 gene cancer panels were not priced (vs. ~$6,852).

He commented, "Given legacy gene stack billing methods are still an option for reimbursement, the impact to ILMN, DGX, LH and QGEN should be rather limited, in our opinion. Additionally, we recently hosted an industry expert call with XIFIN's Rina Wolf. As expected, the conversation centered towards NGS CPT codes as well as CMS' upcoming move to market-based pricing (PAMA). While CMS will ultimately miss its June 30th deadline, Ms. Wolf still expects PAMA repricing in 2017. Encouragingly, inclusion of hospital rates may drive CLFS repricing higher than initially expected, a positive for LH and DGX, in our opinion."

Related Stocks:

Quest Diagnostics (NYSE: DGX)
Genomic Health (NASDAQ: GHDX)
Illumina (NASDAQ: ILMN)
Lab Corp. (NYSE: LH)
Qiagen (NASDAQ: QGEN)

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