Report Finds Genetic Tests and Their Reimbursement Increasingly Complex

The health care technology company Concert Genetics (formerly NextGxDx; Nashville, Tenn.) recently released its third edition of The Current Landscape of Genetic Testing, a comprehensive report looking at the genetic testing marketplace, including trends in available tests and reimbursement.

The report is based on Concert Genetics’ Genetic Health Information Network, a software and information technology platform that aims to enhance the transparency and efficiency of genetic testing for clinicians, hospitals, laboratories, and payers by enabling comparison between all available genetic test products, including laboratory developed tests, available on the market.

Increasing Number of Tests, Particularly Panels
The company’s latest analysis shows that as of March 2018, the total number of genetic tests actively marketed by CLIA-certified U.S. laboratories was 74,448 genetic test units (GTUs; defined as any orderable combination of analytes and techniques at a specific point in time, sold as a single item in a laboratory catalog). On average, more than 14 GTUs per day are entering the commercial market—a pace faster than in previous high-growth years.

During the 12 months ending March 1, 2018, a net total of 801 new panels entered the commercial market at a rate of more than 15 genetic test panels per week. The new net total of panels in the last year represents more than 8 percent of the total number of panels (9,488) on the market, Concert Genetics says.

Continued testing growth, especially in multigene panel tests, is “compounding complexity” across the health care system—from test ordering through reimbursement. The company says that expansion in the number of genetic tests is outpacing ordering formularies, billing code sets, evidence of clinical utility, and coverage determinations. Providers are having difficulty differentiating tests, complicating ordering, and payers face confusion around payment integrity. Their inability to adapt policies to keep pace with test development is causing them to miss opportunities to harness the value of precision medicine, Concert says.

Concerts’ analysis of claims data shows that coding for these panels varies widely. The company’s data shows, for example, that in any given month, expanded carrier screening panels are billed 350 to 450 different ways. During the 18-month period from January 2016 through June 2017, these panels were billed cumulatively in more than 2,500 unique combinations—posing an administrative challenge for payers and other health system providers alike.

Not All Segments Growing, Reimbursed the Same
The number of pediatric and rare disease tests grew faster than any other clinical domain in 2017, Concert says, although there was “substantial” growth in test for the clinical areas of prenatal, cancer, hematology, and neurology.

The test types most commonly launched into the market in the past year do not correlate with the tests being paid for by commercial health plans, Concert Genetics writes in its report. Genetic tests in prenatal, hereditary cancer, and oncology treatment clinical areas represent roughly 90% of all commercial payments, but were not the fastest growing test segments in terms of number of new tests.

Based on the company’s analysis of commercial health plan claims from tens of millions of commercially insured members, whole-exome sequencing, while growing in availability, is not frequently paid for by health plans, calling the total reimbursed volume “marginal.” Specifically, the company shows, the maximum number of commercial health plan paid claims for the two billing codes specific to exome sequencing testing in any given quarter (2015 through 2017) was just 20—”a fraction of a percent of the hundreds of thousands of paid claims across all genetic testing” for this time period, although the company does acknowledge it is “likely” that some exome sequencing tests are being billed and paid under miscellaneous molecular CPT codes.

Takeaway: The number of commercially available genetic tests, particularly multigene panels, are growing substantially, but are contributing to greater confusion in the marketplace around test selection, coverage, and reimbursement.