DUNEDIN, New Zealand – Pacific Edge (NZX, ASX: PEB) today provides additional information to shareholders on proposed changes to the Local Medicare Coverage Determination (LCD) that governs reimbursement for Cxbladder in the United States. This follows Pacific Edge’s decision to request a trading halt on Friday, July 29, 2022 to ensure investors were well informed about the draft proposals.

Proposed changes to the LCD by Novitas, the Medicare Administrative Contractor (MAC) with jurisdiction for the US Pacific Edge lab, have the potential to disrupt Cxbladder reimbursement.

After consulting with our US-based advisors and industry experts, Pacific Edge believes that the proposed changes are unlikely to survive the ongoing review process in their current form. The consensus we received was that the proposed changes to the LCD are contrary to US legal requirements and precedent. The proposed changes also fundamentally change the process for determining coverage for specific tests and could deprive U.S. clinicians and Medicare patients of access to diagnostic tools with proven, peer-reviewed clinical utility.

If the proposed LCD and ACL were approved as is, Cxbladder would not be eligible for Novitas coverage for tests reimbursed by the US Centers for Medicare & Medicaid Services (CMS). These tests represent a significant portion of current Cxbladder test revenue. Several companies with dozens of diagnostic tests that have existing coverage or are seeking coverage would also be affected by this proposal.

Pacific Edge’s Managing Director, Dr. Peter Meintjes, said, “We welcome the broader initiative to simplify and streamline the hedging process. However, given the explicit prior coverage and payment history for Cxbladder testing, we took our initial concerns to Novitas.

“We will work with CMS and its contractors to make any necessary changes to the drafts to ensure there is no disruption to Cxbladder coverage, to the extent of our ability. We will also encourage the many clinicians and healthcare providers who already use our tests to support our position. We will update shareholders as this matter progresses.

Since Cxbladder gained CMS reimbursement coverage in 2020, Pacific Edge has received CMS reimbursement for over 10,000 tests. Cxbladder has also been adopted by some of the largest integrated care networks in the United States and incorporated into their clinical treatment guidelines.

To date, more than 80,000 patients worldwide have benefited from our tests, while the volume of clinical evidence supporting the tests continues to grow. Evidence continues to show how Cxbladder assays can help clinicians safely scale up or down the clinical workup of patients with hematuria, resolve diagnostic dilemmas when evaluating hematuria, and monitor recurrence of Urothelial cancer in post-treatment patients.

Novitas has extended the public comment period on the proposals until September 6, 2022. Novitas did not provide a specific date for a decision, but we understand that it must either publish or withdraw the draft from LCD in the year following the end of the public comment period. . Regardless of a positive or negative decision, we understand that CMS is required to give Pacific Edge at least 45 days notice of the effective determination date.

President Chris Gallaher said, “Pacific Edge remains well capitalized and positioned to achieve our long-term strategic goals.

Pacific Edge will continue to update shareholders on this as new information becomes available.

Published for and on behalf of Pacific Edge by Grant Gibson, Chief Financial Officer.

For more information:

Investors Dr. Peter Meintjes

General director

edge of the pacific

Such. : +6422 032 1263


Richard Inder

The project

Such. : +64 21 645 643


Is Cxbladder still reimbursed in the US?

Yes. But Novitas, the Medicare Administrative Contractor (MAC) responsible for the U.S. Pacific Edge lab in Hummelstown, Pennsylvania, has proposed changes to the Local Coverage Determination (LCD) that governs reimbursement for Cxbladder tests in the United States. United. These proposed changes have the potential to disrupt reimbursement for patients on Medicare and Medicare Advantage plans representing a significant portion of current Cxbladder test revenue.

What is a Medicare Administrative Contractor (MAC)?

The Centers for Medicare and Medicaid Services (CMS) leverages a network of MACs to serve as the primary operational contact between the Medicare fee-for-service (FFS) program and healthcare providers enrolled in the program. MACs perform many activities, including making Local Coverage Determinations (LCDs), which are decisions to cover a particular item or service within a MAC’s jurisdiction.

What is a proposed LCD?

MACs such as Novitas periodically offer new LCDs on whether to cover a particular item or service in a MAC jurisdiction (region). As Novitas notes on its website: “The LCDs offered are works in progress that are available on the Medicare Coverage Database site for public review. The LCDs offered do not necessarily reflect the Contractor’s current policies or practices”.

What did Novitas offer?

In June, Novitas proposed to fundamentally change its approach to determining whether genetic/genomic testing should be reimbursed for Medicare patients in the United States. Specifically, Novitas proposed a new approach to coverage in an LCD project (DL39365/DL3967) and a local coverage article project (LCA, DA59125) for genetic testing in oncology. As part of its current determination of local coverage, Novitas is reviewing the clinical evidence for individual diagnostic products. Going forward, Novitas proposes to determine which tests to cover based solely on criteria established by external third-party knowledge bases: (1) Clinical Genome Resource (ClinGen); (2) National Comprehensive Cancer Network (NCCN); or (3) Oncology Knowledge Base (OncoKB).

What is the impact of the new approach on Cxbladder and Pacific Edge?

If the proposed LCD and ACL were approved as is, Cxbladder would no longer receive reimbursement for Cxbladder from Novitas because the tests are not specifically mentioned in any of the three knowledge bases identified by Novitas. OncoKB and ClinGen are “SNP-only” databases, meaning they are not suitable for Multi-Analyte Testing with Algorithmic Analyzes (MAAA), so advanced gene expression testing might not get coverage that by including them in the NCCN guidelines.

What does Pacific Edge think of the LCD and ACL?

Pacific Edge believes that the proposed LCDs and LCAs will not survive in their current form because:

• They do not meet the legal requirements for an LCD screen.

• They do not comply with CMS requirements for the development of LCD screens.

• Their new approach of using knowledge bases as a determinant of CMS coverage is not well supported in the LCD project.

• The proposed LCD and LCA are insufficient to allow stakeholders to understand whether testing is covered and would inappropriately restrict testing coverage.

What is Pacific Edge doing to change Novitas’ proposal?

Pacific Edge presented in person to Novitas and gave a detailed presentation outlining their concerns and the drawbacks of this new approach in detail. It is also sharing information with other biotech companies that may be similarly affected by the new approach to raise their concerns with Novitas before the consultation period ends and engage with industry advocates. .

If LCD’s draft was first published in June, why did Pacific Edge only notify NZX and ASX and halt trading on Friday, July 29, 2022?

In June, the draft proposals did not appear to affect Pacific Edge as there was no indication that Cxbladder’s coverage under its existing LCD was changing. Also, Cxbladder was not explicitly mentioned in the proposed LCD. However, on Friday morning July 29, 2022 (NZT), the company learned that the latest project review explicitly excludes Cxbladder from reimbursement. In consultation with the NZX, Pacific Edge decided that a trading halt was appropriate as there was information in the public domain that needed clarification and context. Given the time differences between New Zealand and the United States, where the subject matter experts are based, and the complexity of the proposals, a full and comprehensive response could not be provided within a reasonable time frame, which which resulted in a stop exchange request.

When will Pacific Edge know if the proposed LCD is finalized?

Novitas is required to give Pacific Edge at least 45 days notice of the effective determination date. Novitas is consulting with interested parties on the proposals until September 6, 2022. Novitas did not provide a specific date for a decision, but it must either publish or withdraw the draft from LCD within one year of the end of the period. of public consultation.


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