Health Insurers Want More Data On Clinical Utility of Molecular, Genetic Tests

For genetic tests, payers also cite the need for regulation and concerns about price variation

CEO SUMMARY: Genetic tests that lack two essentials are troublesome for the nation’s health insurers. Those essentials are clinical validity and clinical utility. During a recent webinar, two executives from major health insurers stressed the need for genetic testing labs to provide acceptable evidence that their genetic test is accurate and that it produces information that is clinically-actionable and improves patient care. The variability of prices charged by different labs for the same genetic test is another area of concern.

CONFRONTED LITERALLY WITH TENS OF THOUSANDS of new molecular and genetic tests, health insurers are getting increasingly tougher when asked by labs for coverage and reimbursement decisions. Labs should demonstrate the quality and clinical utility of their tests and the quality of their laboratory operations, according to executives from two major health insurers who described what they want from genetic testing labs during a recent webinar.

Few clinical laboratories provide data to support claims that their tests are better than those of other labs, stated Lee N. Newcomer, MD, Senior Vice President, Oncology and Genetics, for UnitedHealthcare. Newcomer was one of two health plan executives on the webinar. The other was Henry Garlich, Director of Enhanced Clinical Programs for Blue Shield of California.

America’s Health Insurance Plans, the trade association for health insurers, sponsored the webinar, along with Concert Genetics (formerly NextGxDx), a company in Nashville, Tenn., that collects and reports data on genetic testing for providers, labs, and health insurers.

During the hour-long session, both speakers explained that they have developed good working relationships with some genetic testing labs but they were concerned about the lack evidence on clinical validity and clinical utility.

The speakers noted that payers also are concerned about consistency—meaning the ability of a lab to do the same test in the same manner each time it’s run—and the lack of evidence supporting the quality of lab tests and lab operations. The lack of standards could lead health insurers to require compliance with regulators, they added.

10-Fold price Variations

One other problem health insurers want to address is the lack of understanding among physicians who order genetic tests, Newcomer and Garlich said. In addition, health insurers are particularly concerned about the cost of genetic tests and the wide variation in what labs charge for similar tests. Variation in what labs charge for these tests could lead insurers to force labs to compete on price, Newcomer said.

Each of these problems offers clinical lab scientists an opportunity to explain the quality, clinical utility, and validity of their tests. Also, the fact that ordering physicians don’t always understand the genetic tests they’re ordering, means labs have a responsibility to educate these providers.

Demonstrate Quality

For pathologists and clinical lab directors, Newcomer said, “You need to find a way to demonstrate your quality that is uniform so that we definitely can compare [your tests with those of other labs]. Without that, we have to make assumptions that price is the only thing that should differentiate you. And I know that every lab will say, ‘We’re better,’ but no lab comes to us with data that demonstrates that.”

Newcomer and Garlich were critical of labs that promote their CLIA certifications as proof that they provide quality testing. “CLIA is not a guarantee of analytic validity,” Newcomer said. “CLIA simply says that you have certain laboratory procedures in place, but CLIA tells us nothing about the individual test. For next-generation sequencing that’s a crucial, crucial gap.”

Evaluation of Genetic Tests

Both Blue Shield of California and UnitedHealthcare evaluate genetic tests the same way they evaluate all new diagnostic and treatment technologies. “Clinical utility is still king and that is best proven in some kind of a cohort comparison trial,” advised Newcomer. “The randomized trial would be ideal but our greatest interest is in evidence of clinical utility—meaning that those tests actually affect a treatment decision and improve health outcomes.

“Without that, a genetic test starts to rapidly fall off on the evidence scales and therefore the ability to provide coverage,” he added.

Asked to estimate how many genetic tests have data on clinical utility, both Garlich and Newcomer said the number was extremely low. “Some estimates suggest that—of all the thousands of tests that are out there—maybe 400 to 500 diagnostic tests have any level of evidence or evidence-based guidelines of clinical utility,” Garlich commented. “It’s a small fraction and, as the number of tests increases, that fraction becomes lower and lower.”

Newcomer agreed, saying, “You’re talking about a single-digit percentage of all lab tests that truly have good clinical utility studies. When you look at the vast categories of spending, I would take out some of the tests that have obvious clinical value, such as cystic fibrosis carrier screening and perhaps even BRCA testing. But beyond that, the data drops off dramatically.”

Issue of Analytical Validity

Another issue of critical concern is analytic validity, noted Newcomer. “In molecular testing, analytic validity is an absolutely critical element. This is particularly true in the area of next-generation sequencing. There seems to still be a very wide variation in reports submitted by the same labs and different labs,” he explained. “Today, unfortunately, there isn’t a good national standard for labs that do NGS.” As a result, he said, UHC has trouble deciding what level of quality to accept to approve coverage for NGS testing.

Perhaps equally troubling is another issue. “Regarding genetic tests, there’s a huge knowledge gap among doctors,” Newcomer said. “I think every physician would tell you that they wished they knew more about this topic.”

Blue Shield of California has similar problems. “It is a tremendous issue to have many of our providers order genetic tests even though they don’t know much about those tests,” observed Garlich. “That’s where a genetic counselor can come in and provide enough information to help guide some of those decisions. And so education is absolutely a key.”

For coverage decisions, Blue Shield of California relies on the clinical assessments from the Blue Cross Blue Shield Association, Garlich explained. In addition, the insurer has developed close relationships with some clinical labs.

“One thing we do that may be a little different than some of our other Blue partners is that we take chances on some genetic tests,” he explained. “We are bringing the labs in to have them describe all of the evidence that’s been done to date. We want to see if there are areas where we can say, ‘This is a genetic test that could benefit our providers.’ If we want to give access to that genetic tests, we’re going to take a chance that this [test] will improve the quality of healthcare and possibly reduce the costs.”

Garlich cited a new test for prostate cancer that another Blue plan studied and determined that the test had a role in reducing the number of radical prostatectomies and radiation therapies these patients needed. “Obviously, that test contributed to significant quality improvement and, of course, the cost to the healthcare was positive as well,” he said.

Newcomer warned, however, that he is skeptical about early study results from new lab tests. “Many laboratory manufacturers will say, ‘Look, this information is available. All docs will use it now.’ And that just isn’t true,” he stated. “They’ll price the test based on the assumption that 90% of docs will use it, when only about 5% or 10% do. As a result, the economics don’t work out.”

Health Plans Want to Support Interaction Between Physicians, Patients for Genetic Tests

WHEN MAKING DECISIONS about whether to cover a genetic test or not, health insurers do not want to come between providers and their patients, two health plan executives said recently. But when making those decisions, insurers need help from somewhere, they added.

“Regarding the decision-making process between the patient and the physician, we don’t want to be in the middle of that activity,” stated Lee N. Newcomer, MD, Senior Vice President, Oncology and Genetics for UnitedHealthcare. “We will, however, take a larger population view about the test and look at evidence and ask, ‘Is this evidence here or not? And if the evidence is there, then we will provide cover- age and those genetic tests will be available to a physician.

“What we’ve discovered in this field of genetics is we need help here,” he added. “We don’t know this field well. Health insurers will need to rely on someone else to help us understand which genetic tests have good performance, which tests are reasonably priced, and, sometimes, how to identify the right clinical situations where a test would be appropriate.

“Thus, as we build our prior authorization system [at UHC], we are incorporating some of that decision support to say [to a physician], ‘here are the questions we need to ask, and here might be an alternative for you,’” explained Newcomer. “One of those alternatives always is the genetic counselor.

“More and more physicians find that they may need extra help in this particular area and so we make genetic counselors available to our patients—either telephonically or in the networks themselves,” added Newcomer. “These counselors will be a critical member of the team for a lot of these molecular and genetic test decisions.”

Garlich agreed, saying, “As the health plan we certainly don’t like to get involved in that decision between a physician and patient. We want to provide as much information as we possibly can to the member with decision support tools, decision aids, videos or infographics—anything that will help that patient with informed decisions.

“Again, that’s a provider responsibility and our view is that we won’t interfere with that,” noted Garlich. “However, we do work very closely with our providers. When our providers ask us to evaluate a specific genetic test because they feel it would be beneficial for their patients, we will evaluate it and we will certainly look at the merits of the evidence,” added Garlich.

“We will look at clinical utility and the downstream healthcare impact as a whole from a population health standpoint,” he said. “If there is a reason for this test to be covered, and if there is enough evidence for us to feel confident that this test will benefit our members or providers in terms of access and it will benefit us in terms of the cost of healthcare, then we will consider making a policy on that test.”

Genetic Test Costs

The cost of genetic testing is a significant issue, particularly the wide variation in what labs charge, said Garlich. Blue Shield of California uses Concert Genetics to identify market prices for tests and thus reduce variation, Garlich said.

“For BRCA testing, in particular, prices range anywhere from $500 per test upwards to $3,500 per test, even when different labs are looking at the same genes,” he added. “That variation in price is a real concern for us. That’s why we develop narrow networks and negotiate very hard with our genetic labs to make certain that they offer fair mar- ket value for our health plans.”

UHC takes a slightly different approach to paying for genetic tests, Newcomer explained. “Our contracting team is integrated with those people who do the economic analysis for us,” he said. “So we might decide that a test could be cost effective at ‘X’ price but not at ‘Y’ price.’ There is a huge opportunity within lab testing because, with the onslaught of tests that look similar, pricing variation can be 10-to-20-fold and physicians are unaware of those pricing differences.

“One of our challenges in the future will be to develop policies as to what is the right test [for specific health conditions],” he added. “The next step is to decide what is the most cost-effective or economical test in that area that still delivers good quality.”

Worrisome Lack of Oversight

When deciding whether to cover a new molecular or genetic test, Garlich said, the lack of evidence of analytical validity and the lack of regulatory oversight are worrisome to his health insurer.

“There are no regulatory bodies that govern this today, so it’s a concern for us to make certain that the quality of genetic testing is high,” he said. “That’s hard to do and that’s why it’s very important for us at Blue Shield to have strong relationships with labs so we can talk to medical directors at the labs about the evidence that sup- ports analytic validity and clinical validity and make certain that they have the compliances that are required by the College of American Pathology or various other organizations.

Lab Accreditation

“We are looking into requiring accreditation through the College of American Pathology and making certain that labs comply with laboratory accreditation requirements in proficiency testing programs for next-generation sequencing,” noted Garlich. “That’s the only thing we can rely on to make certain that there’s consistency with the quality of the lab tests that we provide for our members and providers.”

“Absolutely,” Newcomer agreed. “I don’t know which [laboratory accreditation] organization that might be, but we would all benefit from having standards that need to be met in the areas of molecular and genetic testing.”

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