Dr. Lishan Aklog: Yes. So look, it’s the same assay, Kyle. The same genes. It’s the same CPG islands, the same methylation site. So there’s nothing fundamental at the core with regard to how we’re interrogating the biologic process that’s going on here. So this is really incremental improvement that has — that does have a meaningful incorporation of really cutting edge technology with regard to doing this in a multiplex fashion. So that’s — just to be clear, we’re not introducing an entirely new assay. We’re just taking the same underlying biology, the same genes, to the same methylation and performing the assay in a more efficient way that will give us perhaps a bit of additional edge on performance, particularly as we move towards screening population towards where the magnitude of the positives can be closer to the cutoff.
So we’re just kind of picking our way and doing continuous improvement, and that’s honestly what we should all be doing. In terms of the regulatory question right now, as you know, this is being marketed as a laboratory developed test, and we have had engagement over the years with FDA through multiple pre-submission meetings as well as a breakthrough device. And we will be reengaging with FDA over the long term to have EsoGuard presented as an IVD. But we have — this is — the point is exactly what you suggested, which is we obviously want to have the best version of the assay as we enter into studies that would ultimately, over the long term, get us towards an IVD, which we’ll do and will be necessary for us to do under the current proposed FDA rule.
So yes, we’re just making it better and it’s getting incrementally better. And we think it will be — that will be beneficial and useful for the existing commercial volume and then subsequently, as we advance to future studies we look to take advantage of these benefits, and we may look to continue to improve it. The overall cost, the primary impact on the cost is on the sequencing costs, which is a meaningful portion of that. I won’t — Dennis, perhaps if you’d like to chime in on sort of what the magnitude of that is in terms of the COGS. I mean, obviously, we’re still — we’re operating with a substantial gross margin to begin with, but we do think it will have a meaningful reduction in cost. So I’ll pass that on to Dennis. But before I do on the — let me just comment briefly on turnaround times.
Right now, our turnaround times are seven to nine days. There is certain fundamental core components to that, which include the time it takes to transport the sample to our central laboratory and certain sort of steps along the way with DNA extraction and the by sulfide conversion and so forth. To be perfectly honest, seven to nine days is perfectly fine. This is an elective test, the decision-making around how to — what to do with the results of the test is to schedule and endoscopy. And so we’re quite happy at that level. There may be at higher volumes and opportunity to save a day or two off of that. But that’s not going to — that would not be meaningful from a clinical point of view. So Dennis, I don’t know if you have any further thoughts on the cost of the improvements in costs with the 2.0 version.
Dennis McGrath: Yes. Look, we need to prove it out, but it’s safe to assume that we think there’s about a 10% improvement in our actual costs there.
Kyle Mikson: Okay. All right. That was like great color. Like it sounds as a similar as say, like you said, Lishan like a fundamentally similar performance has gotten better and improved. The workflow is now more efficient. So the COGS improvement as well, 10% pretty good, I would say. That was great. Let me just ask a really quick one before I hop off. The — this progress with commercial and private payers, what are they reimbursing on average? Remember, in the past, that was like 50% to 60% of the Medicare rate? Like how is that looking now?
Dr. Lishan Aklog: Yes, Dennis.
Dennis McGrath: Kyle, maybe you can restate your question in terms of — I’m not sure exactly what — because we talked about allowable plans at nearly the $1,900, right? What were you trying to dissect further?
Kyle Mikson: I guess the commercial payer segment in the past on average, I believe that was — that bucket was kind of paying roughly half at $1,938 rate. So like — I think it was like $1,100 or $1,200 around there, but maybe that has changed in past quarters. So —
Dr. Lishan Aklog: Gone up. I think it’s clears say it’s gone up, right, Dennis?
Kyle Mikson: Yes.
Dennis McGrath: Yes. It has gone up, and I’m actually reaching for the number because I don’t think we’ve published that exactly. So the mean average of allowable claims is $1,863, the actual payment rate. But that —
Dr. Lishan Aklog: You’re looking for that. The actual payment rate is dependent on a few other variables in terms of like deductibles and the portion of the patients responsible for that varies year-to-year based on enrollment periods and so forth. But I think as a generic statement, the average payment that we’re getting for commercial payers is actually higher than it was when we were saying that we were getting about 50% to 60% of our build rate, so the $2,500 bill rate. So it’s definitely increased, if that’s your question, Kyle.
