Payers Continue to Increase Coverage of Liquid Biopsies

Research team expects greater reimbursement as clinicians expand their use of ctDNA tests

SINCE THE FIRST BLOOD-BASED, circulating-tumor DNA (ctDNA) sequencing test for cancer became available in 2014, federal and private payer coverage of these so-called “liquid biopsy” tests has increased substantially. Now, clinical laboratory and pathology directors can expect additional coverage as the clinical utility of these assays becomes more widely accepted. 

The lead author of a 2020 study on ctDNA policies told The Dark Report that he and his colleagues have received a grant from the National Institutes of Health to continue researching payer coverage of ctDNA, including for genes beyond epidermal growth factor receptor (EGFR). 

“What we are expecting to find is a greater increase in coverage, probably expanding to more genes than traditional EGFR,” said Michael Douglas, Program Manager for the Center for Translational and Policy Research on Precision Medicine at the University of California, San Francisco. “We also expect to see the addition of other cancers.” 

As of mid-2019, a total of 65 private payers and four Medicare Administrative Contractors (MACs) had published policies on ctDNA, according to a study published in the July 2020 issue of the Journal of the National Comprehensive Cancer Network (JNCCN) which Douglas led. 

He and the other authors found a shift in private payers from no coverage in 2016 to 38% coverage in 2019. It was a similar story with government health plans. Douglas’ team also noted a shift in Medicare policies from no local coverage determinations (LCDs) for use of ctDNA-based panel tests in cancer indications in 2017 to nine final LCDs and three drafts LCDs by mid-2019. During this same time, insurer policies increased in scope regarding the number of different cancers included, and from a single gene to 73 genes. 

Reimbursement Varies 

The JNCCN study, which examined Medicare policies—as well as those from more than 200 payers covering 75% of private U.S. policies—found that reimbursement varies widely. Some payers specified the type of technology used in the test, others the cancer type, and some only cover a certain test. 

Specifically, the study found that 38% of private payer policies provided coverage of ctDNA-based panel testing for some clinical indications as of July 1, 2019, with most of the policies covering use of these tests for determining treatment for non-small-cell lung cancer (NSCLC). 

The first instance of a positive coverage policy was by Blue Cross Blue Shield Massachusetts in September 2017 for Guardant360, a ctDNA-based panel test for NSCLC. 

Others have also noted improved payments. Kyle Fetter, Chief Operating Officer with XIFIN in San Diego, said this increase in payer coverage for liquid biopsies is consistent with the experience of his revenue cycle management firm. 

“In general, our lab customers are getting covered more and more for the circulating-tumor-cell tests that they perform,” he said. “There is more general acceptance of this type of testing in the marketplace. For example, we’ve experienced a 25% increase in the claims paid on the front end. Similarly, we see a significant increase of 30% in claims paid on the back end with appeals.” 

Still, payment policies are lagging behind clinical guidelines, Fetter said, noting that ctDNA testing is becoming more broadly accepted as a useful diagnostic tool. Although Medicare does not have an explicit national coverage determination (NCD) for ctDNA-based tests, there is one for advanced cancer sequencing. NCD 90.2, issued in 2018, governs the use of FDA-approved or -cleared, next-generation sequencing tests in cancer, both for CDx tests and hereditary risk management. 

This NCD covers the use of next-generation sequencing tests as companion diagnostics—including liquid biopsy tests—on a rolling basis as they are approved by the FDA. Currently, the FDA CDx liquid biopsy tests covered under this NCD are the FoundationOne Liquid CDx and the Guardiant360 CDx. 

Several Medicare administrative contractors (MACs) use LCDs to cover liquid biopsies. For example, L38290, effective Oct. 18, 2020, covers liquid biopsy screening tests for colorectal cancer in individuals with a personal history of this disease. The Signatera molecular residual disease assessment test, developed by Natera, Inc., classifies recurrence risk for patients with nonmetastatic colorectal cancer after treatment. 

Medicare coverage policies are evolving rapidly, noted the JNCCN study. The policy framework for Medicare LCDs is evolving from coverage of specific cancers to policies providing coverage of pan-cancer scenarios, which marks a significant change from early LCDs, wrote the study authors. 

For example, four MACs issued final LCD policies in 2018 for the Guardant360 ctDNA-based panel test in NSCLC, and the same four issued draft LCD policies that would provide pan-cancer coverage in 12 solid tumors. One MAC issued a final LCD effective Feb. 3, 2020, that covers Guardant360, but also includes a provision that “other liquid biopsies will be covered for the same indications.” 

More recently, in September 2020, National Government Services, a MAC, proposed an LCD (DL37810) covering genomic sequence analysis panels in the treatment of solid organ neoplasms. However, the proposed LCD specifically excludes coverage of ctDNA. Still, it is a step in the right direction, Fetter said. 

Medicare Coverage 

“What is positive for this space is that National Government Services, which has been a hold out in terms of covering most types of genetic testing, has proposed much more broad coverage for next-gen sequencing tumor testing,” he said. “This MAC still considers circulating tumor cells to be experimental, so it has no coverage for that specimen type. However, I think it shows growing progress in expanding coverage for NGS testing when the less progressive Medicare contractors finally issue coverage policies that benefit cancer patients.” 

According to the JNCCN study, the overall trend in both private payer and Medicare coverage for ctDNA-based panel testing is an increase in the number of coverage policies and scope of coverage. The majority of private payer coverage policies are written with defined clinical scenarios. By contrast, Medicare policies are evolving to pan-cancer uses and these developments signify a significant shift in coverage frameworks of private and government payers, wrote the study authors. 

“Private payers tend to look at these tests and issue coverage policies faster than Medicare, but Medicare tends to be a little more open to covering multi-cancer tests,” Douglas said. 

The study determined that the majority (87%) of policies were on NSCLS, and nearly half (47%) were for EGFR gene analysis. Further, of those policies on NSCLS, the majority (79%) only covered specifically named tests. 

One of the most interesting findings, according to the study, was in the case of EGFR analysis, in which 43% of payers stated that multigene panel tests (Guardant360 and OncoBEAM) would be a covered benefit for EGFR gene analysis only. Given that tests such as Guardant360 and OncoBEAM are panel tests that evaluate multiple genes, the “limited” coverage decision may actually result in testing that is far more comprehensive than intended. 

Future Research 

The JNCCN study suggests that there is a conundrum between what a test evaluates, what a payer is willing to cover, and the information that a clinician receives and can use to guide clinical decisions. 

As noted above, several payers provide coverage for multigene tests but only allow the analysis of a single gene from those tests. For example, a clinician can order a particular test that looks at dozens of genes, but the payer will cover that test only for analysis of the single EGFR gene. This may lead to test results not covered by the payer but which can be used by the clinician to manage a patient’s cancer. 

As part of the next phase of the study, Douglas and his colleagues will further investigate payer coverage of ctDNA since 2019. Meanwhile, both Douglas and Fetter said that they expect private payers and Medicare to continue to increased coverage for ctDNA as liquid biopsies become more widely accepted in clinical practice. 

Clinical laboratories that offer ctDNA testing would do well to keep up on payer developments, as trends point to greater reimbursement for these services.  

Contact Michael Douglas at 404-314-3752 or; Kyle Fetter at 858- 793-5700 or 

Glossary of Clinical Terms 

Circulating tumor DNA (ctDNA) refers to cancer cells whose DNA fragments enter the bloodstream. 

Epidermal growth factor receptor (EGFR) is a protein on cells that helps them grow. A mutation in the EGFR gene may lead to abnormal growth, which can cause cancer. 

Non-small-cell lung cancer (NSCLC) is the most common type of lung cancer, so named because of the larger appearance of the tumor cells. 

Sources: American Lung Association; MD Anderson Cancer Center; Yale Medicine.

More Growth Expected for Liquid Biopsies

IN RECENT YEARS, use of liquid biopsy tests to inform treatments for cancer has exploded. The most potent driver for this acceptance is clinical trial data showing the benefits of using these biopsies for patient treatment. 

According to, a registry of U.S. clinical trials, there are currently 447 planned or ongoing clinical trials mentioning liquid biopsies, 10 of which have been completed, and 851 mentioning ctDNA, 17 of which have been completed. 

In June 2016, the FDA approved the first liquid biopsy genetic test, a blood-based companion diagnostic (CDx) for the cancer drug Tarceva called the cobas EGFR Mutation Test v2, developed by Roche Molecular Diagnostics. 

Another milestone for liquid biopsies occurred in 2018 when the National Comprehensive Cancer Network updated its guidelines on NSCLC to include the use of “plasma biopsies,” another name for liquid biopsies. This inclusion highlights the acceptance of the liquid biopsy into mainstream cancer care and expectation for its use as standard practice.



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