Genetic Testing Continues to Grow in Volume and Complexity

Payers, providers, laboratories are all frustrated in the need to cope with Tsunami of new genetic tests

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This is an excerpt of a 1,333-word article in the July 26, 2021 issue of  THE DARK REPORT (TDR). The full article is available to members of The Dark Intelligence Group.

CEO SUMMARY: Getting paid for genetic testing continues to be a challenge. This is true for both payers and the labs that perform the tests. Even physicians are dissatisfied with the status quo because they must deal with patients unhappy about the high cost of genetic tests. The problem is likely to get worse before it gets better, because, as Concert Genetics points out, not only are there 166,450 genetic tests offered by more than 300 lab companies, but 39 new genetic tests come to market every day.

GENETIC TESTING LAB COMPANIES ARE OVERWHELMING government and private health plans with an ongoing, multi-year flood of new and different genetic tests. Compounding the problem of obtaining payment for genetic test claims is the fact that the CPT coding system is unable to respond in a timely fashion to this flood of new genetic tests. 

Few pathologists and clinical laboratory managers realize that at least 166,450 genetic tests are offered by U.S.-based, CLIA-certified labs, according to data tracked by Concert Genetics in Nashville, a software and managed services company focusing on management of genetic testing and precision medicine. 

Just 2,000 Unique Lab Tests

Long-serving pathologists can remember back just 15 years ago when the typical clinical laboratory’s catalog of routine, reference, and esoteric tests numbered about 1,500 to 2,000 unique assays. Managing utilization of molecular and genetic tests during that era was much simpler than it is today. 

Moreover, Concert Genetics says that 39 new genetic tests enter the market every day. But this ongoing surge in new genetic tests coming to market is just one aspect of a challenging problem for health insurers. This is equally true of health systems and hospitals that want to manage how their providers utilize expensive genetic tests. 

Complexity of Genetic Tests

“It’s really about the complexity of those tests. We track about 30 different kinds of domains (or specialties) of genetic testing, said Rob Metcalf, Chief Executive Officer of Concert Genetics, during a recent webinar sponsored by The Dark Report, titled, “State of the Genetic Testing Marketplace—Getting Paid for All Your Lab’s Genetic Test Claims: What’s Changing, What’s Not, and What’s Working Best.” 

“These 30 different genetic test domains are what makes it difficult for any stakeholder to stay current,” he commented. “For example, an increasing number of health systems now come to us and ask, ‘Can you help us understand this complexity as we try to manage the ordering and resulting of genetic tests across the multiple physician specialties in our health system?’ ” 

Genetic testing complexity affects reimbursement to labs, particularly by commercial payers, according to Metcalf. “There is ambiguity around the medical policies of the different health insurers as to what’s covered and what’s not,” Metcalf said. 

However, even as health insurers struggle to develop coverage guidelines, establish reimbursement for individual genetic tests, and process these claims in a timely manner, genetic testing labs themselves are a major part of the problem. 

Use of Multiple CPT Codes 

Metcalf observed that, for their part, labs often file test claims that lack genetic testing identification or use multiple CPT (current procedural terminology) codes. 

Misuse of coding, coverage ambiguity, and denials lead to administrative costs for both payers and labs. Concert Genetics data show: 

  • 6.9 codes per claim. 
  • 10 to 90 medical policies per plan. 
  • Denial rate (full or partial denials) of 30% or more. 
  • $125 per test in avoidable administrative cost. 

“These administrative costs impact the laboratory business, and they also impact us as healthcare consumers,” Metcalf declared. “That’s because ultimately those costs get passed on in one form or another. Administrative costs are a big issue across the healthcare system and genetic testing is certainly part of it.” 

Coverage for genomic testing varies and is unclear throughout the United States. And utilization of genetic tests is inconsistent—even in states with favorable coverage polices—according to a report, titled, “Understanding Genomic Testing Utilization and Coverage in the U.S.,” which was released last year by the Personalized Medicine Coalition, along with Concert Genetics, Blue Cross Blue Shield Association, and Illumina, Inc. 

“We don’t have an explanation for all of those factors,” Metcalf said. “But the data suggest that provider behavior is different in different places. And payer behavior is different in different places.”

Health Plans, Providers, Labs 

Concert Genetics takes an ecosystem view of precision medicine, looking at relationships between health plans, providers, and genetic testing lab companies. It found a disconnected infrastructure that prohibits effective and efficient use of genetic tests.

“The relationships involving providers who order the tests, labs that perform the tests, and payers who reimburse for the tests—at least digitally—are not well connected. And that has implications,” Metcalf noted.

According to Concert Genetics, disconnects between the stakeholders are evidenced in:

  • Unclear coverage criteria for genetic tests and inability to measure impact of precision medicine.
  • Excessive prior authorization and high denial rates.
  • No learning from genetic results.
  • Test errors and lost results.
  • Inability to inform physicians.
  • Surprise bills and angry patients. 

Clarity in Test Orders, Results

“What we want to see is improved infrastructure between health plans and providers around understanding coverage,” he stated. “Similarly, lab companies performing genetic tests need clarity in the way their tests are ordered and resulted. 

“Medical policy, quality, and coding can all be more transparent, simpler, and ultimately computable,” recommended Metcalf. “Our company watches this genetic testing space with all of its ambiguity and dynamism and our services are designed to help streamline many processes involved in how genetic tests are ordered, reported, and reimbursed.”

During the webinar, Metcalf explained how both health plans and labs work with Concert Genetics. The goals include modernizing clinical policies, establishing quality reporting, standardizing test coding, and streamlining the process of editing test claims.

“We have tools to make medical policy clear and machine-readable,” he explained. “Similarly, we can take quality metrics and make those comparable across genetic testing labs. 

“Another major activity is our work with providers, health plans, and laboratories to standardize coding of genetic tests,” Metcalf commented. “The ultimate objective is to automate those improvements in systems used by genetic testing lab companies and health plans.”

Is your lab performing genetic tests, and if so, how is it ensuring that it is getting paid for those tests? Please share your thoughts with us in the comments below.

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