Pathologists should take note that an increasing number of patients who want genetic tests are complaining when they learn their insurance plan will not pay for such tests
Concerned about the increased cost of genetic tests, health insurers are becoming reluctant to pay for many types of molecular diagnostics and gene tests. When refusing to pay for these tests, however, they face a buzz saw of angry patients—many of whom see a genetic test as their last resort for a diagnosis and selection of a therapy that might just work for them.
Reuters recently reported that health insurance companies are reluctant to pay providers for genetic-sequencing tests until more research becomes available. This is a sign for pathologists and clinical laboratory managers that enough patients have been affected by this situation to justify news coverage by a major news source.
Health Insurers Demand Proof of Effectiveness of Genetic Tests
The Reuters story, noted, “As use of the new [genetic test] technology has grown, a number of insurers, including Blue Cross Blue Shield, have reacted by putting the brakes on reimbursement. Insurers are demanding proof that the results will lead to meaningful treatments among the estimated two million Americans with a serious, undiagnosed disease”
Insurance companies’ wariness to pay for medical laboratory tests that use genetic sequencing does not come as a surprise to most pathologists and laboratory managers. After all, it’s consistent with payers’ reluctance to establish coverage guidelines and reimbursement for many new molecular assays and genetic tests.
Therefore, it is increasingly important for genetics experts and pathology laboratory professionals to document the value of genetic testing and publish studies in peer-reviewed medical journals. This gives payers the clinical evidence they need to established appropriate coverage guidelines for each genetic test.
Reluctant to Pay, Insurers Cite High Costs and Uncertainty of Genetic Tests
Gene-sequencing testing is gaining acceptance among diverse providers and the public. This puts pressure on insurance companies, noted Reuters. “Once strictly the domain of research labs, gene-sequencing tests increasingly are being used to help understand the genetic causes of rare diseases, putting insurance companies in the position of deciding whether to pay the $5,000 to $17,000 for the tests.”
Blue Cross Blue Shield, a company with 37 independent plans, made its decision clear on genetic sequencing. It issued a whole-exome sequencing report last fall that called this test “experimental, investigational and or unproven for all indications.” It pointed out that only 50% of genetic tests result in a diagnosis, and just a subset of those diagnosed can be medically managed.
As a result, many state Blue Cross Blue Shield plans concluded that whole-exome sequencing is ineligible for coverage. The health plan’s medical policy reads in part: “At this time, there are many technical limitations to whole-exome sequencing that prohibit its use in routine clinical care. The risk/benefit ratio of whole-exome sequencing testing is poorly defined. Therefore, the use of whole-exome sequencing is considered experimental, investigational and/or unproven for all indications.”
Reuters also reported that Cigna generally does not cover whole-genome or whole-exome sequencing unless there is a clear clinical reason for the test.
How Insurers Make Coverage Determinations for Molecular Tests
Insurers’ payment for diagnostic genetic testing is subject to four criterion, according to a spokesperson for America’s Health Insurance Plans, who was quoted in a story published by Insurance News Net. There must be:
1) clinical basis to suspect a specific disease,
2) a valid test to detect that disease;
3) treatment if the test comes back positive; and,
4) agreement from the patient to undergo genetic counseling.
Reuters reported, however, that the DNA Diagnostic Lab at Yale School of Medicine receives enough payments from insurance companies to cover its costs, according to Allen Everett Bale, M.D.. He is a Professor of Genetics and Director of Yale’s DNA Diagnostic Laboratory and was quoted in Reuters’ report.
“There’s a lot of [gene] testing we’re doing that’s getting denied. We appeal it. A lot of time that works, but it’s case by case,” Bale told Reuters.
Payers Reimbursing Less for Genetic Tests
Insurers pay less than they used to pay for genetic tests, according to Rebecca Nagy, MS, LGC, President of the National Society of Genetic Counselors. “Companies that were covering a test at 90% are now covering it at 80%,” she said in an NPR news report.
A UnitedHealth Group report shed light on what its insurance service pays for genetic testing, as well as spending nationally on genetic testing. The report, released in March 2012, estimated that U.S. spending on genetic testing may grow to between $15 billion and $25 billion annually by 2021.
The report also showed that UnitedHealth Group had spent about $500 million for genetic and molecular diagnostic testing in 2012, while spending nationally that year was about $5 billion.
Will Reimbursement Pressures help to drive down sequencing costs?
Previous Dark Daily editions delved into gene-sequencing services and prices at clinical laboratories and diagnostic companies.
Boston-based Partners HealthCare is one of the mega healthcare systems to begin an in-house whole-genome sequencing service. Reportedly, Partners charges $9,000 for a whole-genome sequence test. (See Dark Daily, “Major Healthcare Systems Begin Building In-House Whole Human Genome Sequencing Capabilities, Creating New Opportunities for Pathologists,” February 5, 2014.)
Dark Daily also explored the decreasing cost of whole-genome sequencing at research labs, many of which are using gene-sequencing systems manufactured by Illumina, a San Diego-based technology giant. Illumina is promoting its HiSeqX Ten with the promise of “full coverage human genome sequences for less than $1,000”−down from $250,000 10 years ago. (See links to Dark Daily e-briefings below.)
As the price of whole-genome sequencing continues to fall, so too may insurers’ concerns about its cost. That prediction was made by Stéphane Budel, a Vice President at the consulting firm DeciBio. Reuters quoted him as saying, “There is no doubt it [genetic sequencing] is going to become standard of care.”
Appropriate Payment for Genetic Tests Is a Key Issue
On its website, the National Human Genome Research Institute noted that genomic medicine can advance only so far without the willingness of insurance companies and Medicare to pay for genetic tests.
Most scientists, pathologists, and laboratory professionals know that one approach to helping health insurers make positive coverage and reimbursement decisions for molecular diagnostic assays and genetic tests is to have credible clinical data. Payers need evidence that individual genetic tests are reliable for diagnostic purposes and will help physicians improve patient outcomes.
—by Donna Marie Pocius