Ole Schwander
Castle Biosciences (NASDAQ:CSTL) traded lower on Friday after a local Medicare Administrative Contractor (MAC) updated its coverage policy, finalizing a proposal not to reimburse the company’s DecisionDx-SCC cancer test.
On Thursday, Palmetto GBA, a MAC for Medicare’s Molecular Diagnostics Services program (MolDX), finalized and maintained a non-coverage decision for DecisionDx-SCC, a genomic test to identify the risk of developing cutaneous squamous cell carcinoma.
MACs are private healthcare insurers appointed by Medicare to conduct local coverage determinations (LCD).
With the coverage overhang related to MolDX resolved, another final LCD decision on DecisionDx-SCC expected from Novitas MAC in July, according to Castle’s management, remains the next catalyst, Leerink Partners wrote in reaction.
“Though a positive MolDx decision would have been overwhelmingly positive for the stock, we believe the downside risk is already reflected in the model, with us and the Street both modeling no DDx-SCC revenue after 2Q24,” Leerink added in a Friday note.