Medicare’s coverage for genetic testing is based on each test meeting a “reasonable and necessary” criteria. The decision on whether to order the test depends on real-world patient needs and what existing literature advises. Real-world evidence (RWE) will likely impact Centers for Medicare & Medicaid Services (CMS) coverage, both initially as well as on an ongoing basis. To be clinically effective and equitable, there must be an understanding of how and where genomic testing fits into current clinical pathways, rules surrounding reimbursement, and how relevant clinicians would use it to help their patients achieve better outcomes.
Medicare’s coverage for genetic testing is based on each test meeting a “reasonable and necessary” criteria which is based on a high probability that test results will change provider behavior and improve patient outcomes.1 Clinical pathways can include genetic testing in their guidelines using these same criteria. The decision on whether to order the test depends on real-world patient needs and what existing literature advises. This RWE will likely impact CMS coverage, both initially as well as on an ongoing basis through CMS conditional coverage. Conditional coverage can be changed to a denial of coverage should the RWE not support a genetic tests ability to change provider actions that improve patient outcomes. The Food and Drug Administration (FDA) is superseding this approach by tying a genetic test to the use of a specific therapy, in which case, clinical pathways should incorporate this labeled- or compendium-supported approach.
To be clinically effective and equitable, there must be an understanding of how and where genomic testing fits into current clinical pathways, rules surrounding reimbursement, and how relevant clinicians would use it to help their patients achieve better outcomes. Ultimately, it should go beyond the bounds of teaching hospitals and of enthusiastic champions and leaders of genomics within the various specialties. Evidence-based clinical pathways can provide such education, guiding clinicians on appropriate use of genetic testing.
Course of Genetic Testing
Medicare has provided limited coverage for genetic tests for diagnostic use; however, CMS only covers one genetic test to screen for cancer. The history of Medicare coverage for genetic testing is described by Michael Klug in his article for The Sentinel through his role as a Senior Medicare Patrol (SMP).2 SMPs are an important albeit under-appreciated resource that are
empowered to assist Medicare beneficiaries, their families, and caregivers to prevent, detect, and report health care fraud, errors, and abuse through outreach, counseling,
and education. With regard to genetic testing, SMPs
work to ensure that Medicare beneficiaries are being treated appropriately through education. This article explains the strict coverage criteria for genetic tests and coverage oversight.
This history of genetic testing coverage began in October 2014, with Medicare Part B coverage for the Cologuard™ test to screen specifically for colorectal cancer. This was done through a National Coverage Determination (NCD) for colorectal cancer screening. For beneficiaries between ages 50 and 85 years, Medicare covers the test once every 3 years.2 Medicare Part B pays 100% of the approved amount, similar to other Medicare-covered screening tests, so as to not have patient out-of-pocket costs be a limitation on the use of these types of tests.
Medicare limits coverage for genetic screening tests, but it does cover many genetic tests that meet the criteria for diagnostic tests and are used to treat cancer and other medical conditions. For example, tests developed by Quest Diagnostics that reveal molecular changes in cancerous tumors specific to an individual. Results can help oncologists identify targeted therapies for rare cancers and thus affect provider behavior for improved patient outcomes. Medicare covers genetic testing for the BRCA1 and BRCA2 genes for patients suspected of hereditary breast and/or ovarian cancer syndromes.2 A widely adopted Local Coverage Determination (LCD) states that “Medicare coverage depends on the beneficiary having signs or symptoms of breast, ovarian, pancreatic, or prostate cancer and meeting one of several other criteria.” Current signs or symptoms of cancer must be present for Medicare to cover genetic testing for a known inherited mutation in a family.2 “Testing of an unaffected Medicare eligible individual or family member is not a covered Medicare benefit.”3 As such, the exact criteria for testing needs to be fulfilled and be appropriately set as Medicare typically aggressively limits coverage to affected individuals. The definition of an eligible individual is critical in such situations and should be articulated where appropriate in clinical pathways.
Medicare also covers some genetic tests that assess an individual’s ability to metabolize certain drugs. Warfarin is one example of Medicare’s coverage for pharmacogenomics. The NCD for genetic tests to measure warfarin responsiveness explains that, “Pharmacogenomics denotes the study of how an individual’s genetic makeup, or genotype, affects the body’s response to drugs.”4 With warfarin, Medicare pays to test two genes as long as the test is part of a clinical study. Conditional coverage is fairly common while Medicare and its contractors are developing evidence of coverage for new diagnostic technologies based on assessment from RWE.
CMS “Reasonable and Necessary” Criteria
CMS has delegated responsibility to the A/B Medicare Administrative Contractors (MACs) to ensure that genetic testing meets Medicare’s statutory “reasonable and necessary” requirement. Palmetto GBA is the MAC
for Alabama, the Carolinas, Georgia, Tennessee, Virginia, and West Virginia. In 2011, they introduced a program called MolDX (Molecular Diagnostics) in order “to identify and establish coverage and reimbursement policies for molecular diagnostic tests (MDTs), including genetic tests.” As a requirement, laboratories and manufacturers must register their MDTs and present data that demonstrates the test’s “clinical utility.”2 Clinical utility requires a high probability that test results will change provider behavior and improve patient outcomes—this is the foundation for coverage.
Mr Klug’s article notes a case wherein four MACs used the MolDX’s clinical utility standard to withdraw coverage for a genetic test that the manufacturer promoted as a “rule out” test for stable, nondiabetic patients who showed new signs of coronary artery disease (CAD).2 The RWE did not support this test’s ability to successfully impact providers’ actions resulting in improved outcomes. s such, an LCD issued by the MolDX MACs said that, “Since initial coverage, the manufacturer has failed to demonstrate that testing resulted in improved patient outcomes or that testing changed physician management to result in improved patient outcomes.”5
FDA Inclusion of Genetic Testing
CMS coverage determination is superseded by the FDA inclusion of pharmacogenomic information within a treatments label. FDA has included this information in the labels of some 200 drugs, including many used in oncology, psychiatry, and anesthesiology. As such, inclusion of a genomic test in an FDA label makes companion testing coverage by CMS reasonable and necessary. Medicare only had 11 LCDs in 2012 to address coverage criteria for genetic tests. But today, there are several dozen Local Coverage Articles that the MACs issue to clarify their noncoverage policies. The incorporation of FDA indication for genetic testing as well as that supported by RWE to support the reasonable and necessary coverage for genetic testing can be incorporated into clinical pathways to assure appropriate use and as such improve clinical outcomes.
With clinical pathways expanding in use and complexity, integration of guidance on ordering genomic testing is key so that the appropriate patients are referred at the ideal time in their care journey. As payers grow to trust in the quality and effectiveness of pathways in reducing costly resource utilization, such integration may aid in coverage determinations and prior authorization as well.
1. Centers for Medicare & Medicaid Services. Decision memo for next-generation sequencing (NGS) for Medicare beneficiaries with advanced cancer (CAG-00450R).
Published January 27, 2020. Accessed October 9, 2020. https://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=296
2. Klug M. Genetic tests and Medicare: coverage and oversight. The Sentinel.
Published May 2019. Accessed October 9, 2020. https://www.smpresource.org/Handler.ashx?Item_ID=E3BA48E4-57F1-458B-B3D1-7F22FD13FF58
3. Centers for Medicare & Medicaid Services. Local coverage determination (LCD):MolDX: BRCA1 and BRCA2 genetic testing (L36161). Updated January 25, 2019. Accessed
October 9, 2020. https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=36161
4. Centers for Medicare & Medicaid Services. National Coverage Determination (NCD) for Colorectal Cancer Screening TESTs (210.3). Accessed October 9, 2020. https://www.cms.gov/medicare-coverage-database/details/ncd-details.aspx?NCDId=281
5. Centers for Medicare & Medicaid Services. Local Coverage Determination (LCD): MolDX: Corus® CAD Assay (L37673). Updated December 14, 2018. Accessed
October 9, 2020. https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=37673