How to Cover Genetic Tests Confounds Health Insurers

UnitedHealthcare announced requirement for genetic test pre-authorization later this year

CEO SUMMARY: Managed care experts say health insurers are being overwhelmed by the number of new genetic tests and that many labs find it tough to get paid for these tests. UnitedHealthcare just announced it will require pre-authorization of molecular and genetic tests during 2016. Meanwhile, Cigna, which already has pre-authorization in place for certain genetic tests, said it intends to cover exome sequencing tests for selected patients, but it will not cover whole-genome sequencing.

HEALTH PLANS ARE STRUGGLING to find the best way to manage the rising tide of new genetic and molecular tests entering the market every week. Coverage policies vary by payer.

For example, on March 1, 2016 UnitedHealthcare announced that it would introduce prior authorization for molecular and genetic tests in the third quarter of this year. Between now and then it would release details on how the “mother-may-I” approach would work.

UnitedHealthcare actually has been behind the curve in adopting prior authorization for genetic testing, stated Paul von Ebers, former President and CEO of BlueCross and BlueShield of North Dakota. “Most Blue Plans, Aetna, and Cigna have had prior authorization for these tests for a while,” he added.

NextGxDx, a health IT company, estimates that clinical labs introduce eight to 10 new genetic and molecular tests each week. This is why a payer’s review and approval for every test is a significant undertaking, requiring an army of geneticists, genetic counselors, pathologists, and PhD-clinicians to meet the demand.

Health plans seeking to manage these tests are using a wide variety of methods to contain utilization. No one method seems to work for all. “It’s all over the map,” said Rina Wolf, Vice President of Commercialization Strategies, Consulting, and Industry Affairs for Xifin, Inc., a revenue cycle management company for labs.

Pre-Authorization Policy

In response to a question from THE DARK REPORT, UnitedHealthcare spokesman Daryl Richard said, “Prior authorization is already required for certain genetic tests, such as BRCA testing. We also request genetic counseling visits in advance of testing with an independent counselor to remove potential conflicts of interest that could arise if a genetic testing lab was providing the counseling on services it performs. We also encourage our members to contact InformedDNA as an additional resource. This company maintains a database of genetic specialists who provide independent reviews.”

“Here at Xifin, we track the policies for different payers and we find these policies changing almost on a daily basis,” explained Wolf. “That is just one problem for labs. Another problem is that most labs do not have a direct encounter with the patient. Therefore, it’s difficult for a laboratory to know when prior authorization is required and when it’s not.”

Von Ebers, former President and CEO for Blue Cross of North Dakota, agreed, saying insurers have recently stepped up their vigilance on new expensive molecular and genetic lab tests. In addition, genetic testing labs often are left out of exclusive contracts between insurers and the leading national lab companies.

“In many cases, insurance companies have consolidated their lab deals into exclusive or semi-exclusive contracts with major national or regional labs to get the best prices across their whole lab spend,” said von Ebers, currently President of Prospective Health LLC  in Fargo, N.D.

Start-up Labs Struggle

“Many start-up genetic testing labs have had trouble getting contracts with the largest insurers, such as UnitedHealth, Aetna, Cigna, and Anthem, because of these exclusive deals,” he added. “To get around this problem, some labs have tried waiving the fees patients have to pay because genetic testing is so expensive.

“But the issue goes beyond the expense of these tests,” observed Von Ebers. “That’s because insurers cannot effectively negotiate prices if they must accept all providers or if there are no disincentives for plan members to go to non-contracting providers.”

“When prior authorization is required, the lab, the patient, and the ordering physician may wait weeks and still not get an approval,” stated Wolf. “Then, if a lab tries to force the issue, it might get a flat denial with no explanation. Labs have told us that, when they attempt to get prior authorization, payers sometimes call the lab’s physician client and pressure him or her either to not order the test or to order it from an in-network lab.

“Even when a plan requires prior authorization, it can be extremely difficult for labs to get that approval,” continued Wolf. “The ordering physician has to call the plan to get approval, but that can be a challenge, particularly if that patient’s plan or specific circumstances don’t allow such tests or if the patient is out of network.

Third Coverage Problem

“There is also the third problem of which specific plan from Aetna, United, or Cigna, requires prior authorization,” she added. “Aetna could put this policy in place, but it doesn’t apply to every Aetna product or it doesn’t apply to a self-funded plan because the employer may not require it. Or an employer may require it but the payer doesn’t require it in general.

“Sometimes, clinical labs will skip the prior approval phase, run the test, and then ask the health plan to pay for it,” said Wolf. “In essence, the labs are asking for forgiveness rather than getting permission first. They do this because a lab does not have a direct encounter with the patient. Thus, this lab won’t know the clinical circumstances. Only the ordering physicians know those details.”

Some health plans, such as Cigna, require genetic counseling for certain tests, particularly for the BRCA1 and BRCA2 tests for breast cancer. “But again, the lab may not know that genetic counseling was provided. Only the physician can state that this was provided for the patient,” she said. “We recommend that our clients who perform these tests capture information about genetic counseling on their requisitions.

“Right now, Cigna seems to be the most forward-thinking health plan when it comes to whole exome testing,” Wolf added. “They do require that certain criteria be met and are requiring genetic sequencing for those tests.”

In November, Carol Hall, Xifin’s Payer Relations Manager, said Cigna issued a policy saying it would cover whole exome sequencing (WES)  for some patients. When it did so, it was the first time a national health plan explained its coverage criteria for WES, Hall reported. (See panel below.)

Before approving any test—especially expensive genetic or molecular tests—most health insurers will ensure that the test actually will result in improving a patient’s care, von Ebers said.

“Precision medicine is a wonderful idea and eventually it will probably allow the medical system to focus treatments on what works at the individual patient level,” he noted. “The problem is that many labs offering genetic and bio-marker tests will recommend broad criteria for screening and they often package multiple genetic tests into a single panel.

Results to Guide Treatment

“Insurers would love to pay only for treatments that will work on an individual patient, because the savings of effective precision medicine are theoretically huge,” said von Ebers. “But many times the genetic tests do not produce results that can actually affect treatment. In general, insurers will pay when the genetic testing is clearly indicated for this patient due to his or her ethnic background, disease state, or other factors and when the results of the test have a meaningful chance of changing the treatment.

“Over time, insurers will get better at managing molecular and genetic tests,” he concluded. “The controversy over this issue will calm down for two reasons.

“First, some labs do a better job of selling the value of their tests to payers and are learning to work within the health plan’s rules,” he observed. “Second, more genetic tests will be approved for payment over the next few years, and the prior authorization will be relaxed when some clear standards are set as to which patients benefit from these tests and which don’t.”

Contact Rina Wolf at 858-793-5700 or rwolf@xifin.com; Paul von Ebers at 701-306-1579 or paul.von ebers@ prospectivehealthllc.com.

Cigna Corp. Now Covers Whole Exome Sequencing

FOUR YEARS AGO, JUST A HANDFUL OF LABS offered whole exome sequencing (WES). At the time, THE DARK REPORT wrote that, for diagnostics, WES was not yet routine, but genetic testing labs, such as Ambry Genetics, were getting close. Also quoted was one researcher who characterized WES as promising but ‘not quite ready for prime time.” (See TDR, April 2, 2012.) Now, that assessment may be changing.

In November, Cigna announced that it would cover WES under certain criteria. It is the first national health insurer to make this decision. Most health plans consider WES and whole genome sequencing (WGS) to be investigational or experimental. When it announced its coverage decision on WES, Cigna decided not to cover WGS, saying such tests were experimental, investigational, and as yet unproven.

For its coverage policy on WES, Cigna worked with InformedDNA, a company in St. Petersburg, Florida, that uses genetic counselors to advise health plans, providers, hospitals, and patients on genetic testing. (See TDR, August 19, 2013.)

Cigna and InformedDNA determined that coverage for whole exome sequencing would be appropriate if: a) a geneticist or specialist physician decided the testing would affect the patient’s outcome; b) that the patient’s condition had a genetic component; and, c) that tests for a single gene or with a panel of genes would likely fail to identify a cause.

Further, Cigna decided that WES would be appropriate if it meant the patient and clinician could avoid repeat invasive workups, also known as a diagnostic odyssey.

Cigna stated that, for the general population, WES was not necessary and it would not cover WES for prenatal diagnosis or preimplantation testing of an embryo.

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