Improving genetic test reimbursement

An explosion in genetic testing

The mapping of the human genome in the early 2000s has enabled new tests to be developed that identify rare diseases. This also gave rise to a burgeoning retail genetics market. You can now purchase home-test kits to find clues to your ancestry or predisposition to disease.

According to research by Health Affairs, there were approximately 75,000 genetic tests on the market in 2017. And they estimate that 10 new tests are added each day.¹

It’s an exciting time for science and clinical discovery. But many health-system segments have had trouble keeping up with the pace of genomics market growth.

The U.S. genetic testing market is expected to reach $10.29B by 2027, up from $4.11B in 2019.² Getting a handle on the clinical side of this market is critically important for health plans as they work to control costs.

The reality of genetic test reimbursement

Currently, there are only 300–400 current procedural terminology (CPT®) codes for the tens of thousands of clinical genetic tests available.

Tests prices range from $35 to $10,000. Consumers, health plans, laboratories and providers would benefit from greater transparency and alignment around genetic testing.

Health plans are especially challenged by the lack of standards for genetic test coding and reimbursement. Tremendous variability and a lack of common vernacular means that when it comes time to pay, figuring out who’s responsible is tricky.

In the end, health plans often end up paying too much or paying for things they shouldn’t, and copayments are taken on by consumers. In some cases, labs are left holding the bag.

The testing problem: Variability

With so many genetic tests available, and so many laboratories to choose from, there’s bound to be variability in test results. This creates confusion when it comes to validating clinical effectiveness and appropriateness.

In fact, many available genetic tests have no clinical value or lead to no change in a treatment plan.

The testing problem: Vernacular

However, what is available in terms of coding for genetic tests (hundreds of CPT codes for 75,000 tests) is vastly insufficient. The lack of a common vernacular further increases this existing problem.

There’s no single registry for test identification and payment. Currently, there are a handful of registries in use — all created for different reasons.

Solving the genetic testing problem

We’re focused on providing highly valuable content and guidance on coding and reimbursement. We believe there’s value in an industry-wide solution that:

• Properly identifies genetic tests
• Maps billing codes to these tests
• Probes for appropriate billing behaviors

We’re taking a proactive approach to managing genetic testing spend and accurate reimbursement.

We want to arm health plans with a clear set of coding practices, reimbursement standards and policies. Enabled by technology and informed by clinical geneticists and pharmacists, these standards can help guide providers.

1. Phillips KA, Deverka PA, Hooker GW, Douglas MP. Genetic test availability and spending. HealthAffairs. Published May 2018. Accessed July 19, 2021. 
   
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3. Fortune Business Insights, "U.S. Genetic Testing Industry, 2020-2027." March, 2021. Accessed August 8, 2021.