View My Shopping Cart

Genetic Tests and Precision Medicine Start to Win Acceptance by Some Payers; Pathologists and Clinical Laboratories Have Opportunity as Advisors

UnitedHealthcare to cover Foundation Medicine’s comprehensive genomic profiling assay for solid tumors, but Medicare still reluctant to reimburse for genetic tests

Studies showing success of targeted therapies in cancer care may be having an influence on the decisions by certain health insurers to reimburse clinical laboratories to reimburse for certain genetic tests.

One example that press reports cite is how last December UnitedHealthcare began reimbursing for a certain genetic test for patients with a particular lung cancer, according to a statement from Foundation Medicine (NASDAQ:FMI). Based in Cambridge, Massachusetts, Foundation Medicine describes itself as “a molecular information company dedicated to a transformation in cancer care in which treatment is informed by a deep understanding of the genomic changes that contribute to each patient’s unique cancer.”

Pathologists and medical laboratory leaders are well aware that private insurers and Medicare have been reluctant to offer coverage for genetic tests. Dark Daily covered this problem as far back as 2013. (See Dark Daily, “Failure to Pay for New Molecular CPT Codes Created Money Crisis for Clinical Laboratories and Pathology Groups,” August 30, 2013.)

Thus, the agreement between UnitedHealthcare and Foundation Medicine is an indication that some health insurers are willing to consider reimbursing for certain molecular and genetic tests that patients may need as part of a treatment plan with targeted therapies. The odds of a favorable coverage decision for these tests increased when such tests are supported by clinical studies published in peer-reviewed medical journals.

UnitedHealthcare Covering Foundation Medicine’s Genetic Test for Lung Cancer

UnitedHealthcare now covers the FoundationOne assay for patients with metastatic stage IV non-small-cell lung cancer (NSCLC). This comprehensive genomic profiling assay for solid tumors enables physicians to make treatment decisions by identifying the molecular growth drivers of their patients’ cancers, Foundation Medicine said in the company’s news release.

“This national coverage agreement with UnitedHealthcare is an important step towards broader reimbursement for Foundation Medicine, and importantly, it’s a significant advance for patients with metastatic NSCLC,” said Michael Pellini, MD, CEO, Foundation Medicine, in the company statement.

Michael Pellini, MD, CEO, Foundation Medicine, said studies have shown that improved clinical outcomes are achieved when patients are matched to targeted therapies based on unique genomic alterations contributing to disease. “We look forward to building upon our relationship with UnitedHealthcare and other national insurers as we continue to demonstrate clinical and economic evidence supporting coverage and payment for FoundationOne in additional cancer types,” he said. (Photo copyright: Xconomy, Inc.)

Michael Pellini, MD, CEO, Foundation Medicine, said studies have shown that improved clinical outcomes are achieved when patients are matched to targeted therapies based on unique genomic alterations contributing to disease. “We look forward to building upon our relationship with UnitedHealthcare and other national insurers as we continue to demonstrate clinical and economic evidence supporting coverage and payment for FoundationOne in additional cancer types,” he said. (Photo copyright: Xconomy, Inc.)

However, Medicare continues to balk at covering expensive genetic tests without further proof that these tests lead to better outcomes for cancer patients. Thus, Foundation Medicine does not get reimbursed for tests offered to its Medicare clients, which make up about 30% of the company’s business, according to an article in STAT News. And private insurers who cover the FoundationOne test reportedly pay $3,500.

Some Genetic Tests Do Receive Reimbursements and Some Do Not

Meanwhile, Myriad Genetics, a leading molecular diagnostics company based in Salt Lake City, obtained coverage from Medicare in August for its Prolaris prostate cancer test. The test, which determines the aggressiveness of prostate cancer, measures activity level of four genes, and provides doctors with information on a tumor’s genetic profile, according to Myriad Genetics.

“It is fair to say that reimbursement in personalized medicine is still in its infancy, and there are still some shifting sands around the criteria required for reimbursement,” said Mark Capone, CEO, Myriad Genetics, in an Evidence-Based Oncology article published in the American Journal of Managed Care (AJMC.)

Payers’ Concerns about Paying for Genetic Tests

While private insurers and Medicare are taking some steps toward genetic test reimbursement, they do so while expressing serious concerns about the number of molecular assays and genetic tests that have little data to support their effectiveness in clinical use. News sources report that payers’ questions appear to go beyond the cost of the specific test and venture into the unknown:

• What may be discovered about the patient’s health?

• Will the treatment be expensive?

• Will it truly improve the patient’s outcome?

As STAT put it, Medicare and other insurers want evidence that genomic profiling will enhance clinical results.

CellNetix Pathology & Laboratories, a pathology company headquartered in Seattle, Wash., identifies payers’ concerns about adopting next-generation sequencing (NGS) tests in a company online article that also pointed to progress, especially in drugs targeting genes associated with cancer’s start and growth:

• Immense volume of data produced by the tests and possibility of “abnormalities” that may not be relevant to the tumor being tested;

• Tests could lead to some of the most expensive cancer drugs on the market that may not be of certain benefit and value;

• Difficulty exists among payers to establish a framework for evaluating precision medicine testing and treatment, perhaps due in part to struggles to understand test principles.

Education Role for Medical Laboratories about the Proper Use of Genetic Tests

So, what is the role for medical laboratories in educating payers and providers about, for example, pharmacogenomics tests used to determine whether a patient will benefit from a specific drug?

In the interview with Evidence-Based Oncology, Myriad’s CEO Mark Capone advised that lab test companies seeking input from payers should begin by understanding what evidence a health insurer requires when making a coverage determination for specific tests. He also called on clinical laboratories to educate physicians about how to identify patients for whom the test is appropriate, how to interpret tests, and how to tailor treatment after the genetic test results are reported to the ordering physician.

CellNetix advocates arrangements between payers, oncology groups, and medical laboratories aimed at “right treatment at the right time” for patients.

To that same point, Foundation Medicine said it intends to develop relationships beyond UnitedHealthcare with other national insurers. Important to the discussions, the company said, is clinical and economic evidence that supports coverage and payment for FoundationOne in additional cancer types.

Pathologists and laboratory administrators already understand the need to be part of the discussions about the proper utilization and interpretation of genetic tests with physicians, payers, and genetic testing labs and companies. Education may help stakeholders come to a better understanding of precision medicine and genetic testing’s value to patients that can ultimately aid decisions about appropriate reimbursement by payers.

—Donna Marie Pocius

Related Information:

Foundation Medicine Announces National Agreement with UnitedHealthcare for FoundationOne in Metastatic Non-Small Cell Lung Cancer

Interest in Precision Medicine Grows, But Reimbursements Slow to Follow

Myriad’s New CEO Discusses Promise, Challenges of Changing Times in Genetic Testing

Precision Medicine Faces Hurdles from Reluctant Payers

Precision Medicine Showing Early Signs of Success

Why Precision Medicine Will Not Create a Medical Revolution

Failure to Pay for New Molecular CPT Codes Created Money Crisis for Clinical Laboratories and Pathology Groups

Leave a Reply

Your email address will not be published. Required fields are marked *


Copyright © 2017-2019 the Dark Intelligence Group, Inc. All rights reserved. Reproduction in whole or part without permission is prohibited. We Value Your Privacy! The Dark Intelligence Group will never sell, rent or otherwise abuse your email address. It will be used solely for the purpose of sending you the Dark Daily newsletter and updates about the Dark Daily. Should you wish to unsubscribe at any time, instructions are included with each email for immediate removal from the Dark Daily newsletter subscriber file.