MADISON, Wis. (TheStreet) -- Medicare officials are recommending a $502 reimbursement for Exact Sciences' (EXAS - Get Report) Cologuard colon cancer screening test, according to a preliminary payment report issued Thursday night.

If confirmed later this year, the $502 price for each Cologuard test is a big win for Exact Sciences because it means Medicare gave the company everything asked for during reimbursement negotiations. Exact Sciences' bulls on Wall Street were hoping for a Cologuard Medicare reimbursement in the range of $300-$500, while the bears believed Medicare would only recommend a price of $100 to $150 per test.

Approved in August, Cologuard is the first non-invasive screening test for colon cancer which works, in part, by detecting the presence of mutated DNA in stool. Exact Science's Cologuard is superior to existing stool-based colon cancer screening tests, most notably for the detection of pre-cancerous lesions. Colon cancer is preventable and curable if pre-cancerous lesions are detected early and removed before they have a chance to progress into full-blown malignancies. Exact Sciences believes widespread adoption of Cologuard has the potential to put a dent in colon cancer rates. 

In an August column, I explained why Exact Sciences was more likely to get favorable CMS pricing in the $300-$500 range.

On Thursday, the Centers for Medicare & Medicare Services (CMS) issued a final National Coverage Determination for Cologuard, confirming a preliminary decision to endorse and cover the colon cancer screening test issued in August in parallel with the Food and Drug Administration approval. Thursday's announcement did not include any discussion of Cologuard pricing.

However, this separate CMS document, "Clinical Laboratory Fee Schedule (CLFS) -- Preliminary Determinatons," does discuss Cologuard pricing and appears to give Exact Sciences the full $502 reimbursement.

Here's the relevant passage from the CLFS document:

Code G0464 (Colorectal cancer screening; stool-based DNA and fecal occult hemoglobin (e.g., KRAS, NDRG4 and BMP3)).

Industry Recommendation: Crosswalk to Code 81315 (PML/RARalpha, (t(15;17)), (promyelocytic leukemia/retinoic acid receptor alpha) (eg, promyelocytic leukemia) translocation analysis; common breakpoints (eg, intron 3 and intron 6), qualitative or quantitative) PLUS Code 81275 (Kras (v-Ki-ras2 Kirsten rat sarcoma viral oncogene) (eg, carcinoma) gene analysis, variants in codons 12 and 13) PLUS Code 82274 (Blood, occult, by fecal hemoglobin determination by immunoassay, qualitative, feces, 1-3 simultaneous determinations).

CMS Recommendation: Crosswalk to Code 81315 PLUS Code 81275 PLUS Code 82274.

Rationale: CMS agrees with the commenters recommending the crosswalk to Code 81315 PLUS Code 81275 PLUS Code 82274, based on similarities in function of these tests with the components of the new test.

Does this read like incomprehensible gibberish to you? Don't worry, you're not alone. The key here is that CMS is recommending billings codes 81315, 81275 and 82274 for Cologuard reimbursement. These are the same CMS billing codes requested by Exact Sciences, seen in the company slide below, which (thankfully) includes the corresponding reimbursement prices:

You can find the same slide and information in Exact Sciences' investor slide deck available here.

A word of caution: The $502 reimbursement price for Cologuard is a preliminary recommendation, which means it's subject to a public comment period before being finalized. Theoretically, the final pricing determination could change. There has also been no official word from Exact Sciences about Medicare pricing for Cologuard. The company issued a press release Thursday night but it only covers the CMS final National Coverage Determination. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.