Mark Massaro: Excellent. And then last question is a two-pronged one. You had your CAC meeting. I believe it was with NGS in New York. Can you just give us a procedural update of where we are in your quest to obtain an LCD from either NGS or one of the other local contracting MACs. And then also, there have been other blockbuster diagnostics that have had FDA approval that have obtained national coverage determinations. Can you just give us maybe an update on just maybe reiterate, do you still think that you’re qualified to obtain an NCD? And is that a pathway you guys are pursuing? And also procedurally, what needs to happen there to get a sense of how achievable an NCD or LCD might be?
James McCullough: Yes. Very good questions. Tom, if you’re connected, I’ll let you take that one.
Thomas McLain: Sure. So we need either a local coverage determination or a national coverage determination. And have you observed with Medicare, we’re pursuing all pathways. With regard to National Government Services, which oversees or pays for any type samples that are run in our New York laboratory, they recently convened a CAC panel meeting. As we said, external experts, it’s part of the LCD process. And when something is as innovative as KidneyIntelX under 21st Century Cures, the contractor wants to make sure they make the clinical community aware of the evidence and seek their evaluation of the evidence as part of moving the LCD forward. As we said, we’re very pleased with the outcome. In particular, as you know, KidneyIntelX is intended for use by primary care physicians and the community-based primary care doctor on the call spoke very highly of the value that this risk assessment would have an ability to deliver appropriate care for patients.
NGS will now take that into consideration with what we believe was an important endorsement for the value of the test. They would draft the local coverage determination, review it with CMS, which is required, and then release that local coverage determination and hold an open meeting. So that is where we are in the cycle. We would expect it would be possible to see something early in calendar year 2024 based on the timing of the CAC meeting. With regard to other contractors, we do have a laboratory in Tampa, Florida, that is under the jurisdiction of First Coast, which has also been a contractor that pays for innovative diagnostics under individual claim review. We will submit initial claims to First Coast to begin that process, and we will also submit an application for a local coverage determination.
And that just gives us more support, more opportunities to get local coverage determination adoption. At a national level, as you know, under breakthrough designation, there are some devices that are given parallel review. We have been under informal parallel review, which means that we have been working with CMS at a national level as we’ve gone through the FDA review process. As we came to the conclusion of the FDA review, we are able to submit for a national coverage determination. Typically, with diagnostics, CMS looks to the local contractors to make those determinations. But after receiving FDA approval, we did meet with CMS and let them know of our intention to apply for an NCD. We will do the submission for that we believe, within the next three to three weeks and wait to have feedback after they’re able to review our dossier.
And then we also continue to monitor a new rule, which is TSAT, which would provide coverage to breakthrough devices that are FDA approved. The industry hopes that, that rule can be finalized by the end of 2023. And we would expect that KidneyIntelX would be eligible to also submit for a national coverage determination under that TSAT rule. Again, the important criteria there is that we are an FDA-approved breakthrough designated device.
Mark Massaro: That’s super helpful. There are quite a few avenues ahead of you, but thanks so much for all the color.
Thomas McLain: Thank you.
Operator: [Operator Instructions] The next question comes from Jens Lindqvist with Investec. Your line is now open.
Jens Lindqvist: Yes. Hi, guys. Just coming back to the KDIGO guidelines for a moment. I assume you’ve seen at least part of the draft report. Now can you share any color as you’ve been sworn to silence by the KDIGO Committee on the recommended positioning and use of KidneyIntelX in the revised guidelines, I mean, in terms of eligible patient groups, potential repeat use, et cetera? And is this consistent with your own view on how to best deploy the test? And second on the question raised earlier by Chris Glasper. Can you be just a bit more specific on the out of the possible, please, with regards to cost reductions. Broadly, what proportion of OpEx would you see as realistically variable without jeopardizing the medium-term performance of the business?
Are we talking about single-digit or potentially a double-digit million over the current year? And then finally, for OJ, what’s the reason for the unexpected increase in payables, please? How can we see that unwind over the coming couple of quarters? Thank you.
