A better way for doctors and health plans to manage genetic tests

New technology has a history of overwhelming existing systems that try to manage it, and that’s proving to be the case with genetic testing and health care.

It’s been only 20 years since the completion of the Human Genome Project opened the door for genetic testing and its promise for more lifesaving screenings and precise, personalized medicine. There are now 175,000 genetic tests on the clinical market, and 10 new tests are introduced every day. That is an overwhelming number, more than any clinician or health plan is equipped to deal with — and it doesn’t even include the growing number of direct-to-consumer tests patients have performed and then present to their providers. Few clinicians have the training or education necessary to evaluate the necessity, accuracy, and worth of all possible tests, let alone to incorporate the results into practice.

Like clinicians, health plans are struggling to determine which tests are the most valid, offer the greatest benefit for patients, and should be part of a coverage plan. There is a clear need for a better system for handling genetic testing.

Testing is the single highest-volume medical activity in this country, with more than 14 billion tests performed each year. Approximately 70% of clinical decisions are based on lab testing, but, according to an analysis in PLOS ONE, an estimated 30% of all tests are ordered in error, primarily due to overuse and unnecessary repeats.

Though genetic tests comprise only 10% of all lab tests, the percentage is growing. Utilization in November 2022 was up 15% from November 2021, and health plan spending was up 11% in the same period. And genetic tests tend to cost more: an average spend of $779 per member per year for genetic tests compared with $226 per member per year for routine tests.

Because genetic tests are newer, clinicians and health plans are less able to evaluate their worth. The inability to better manage genetic testing also stands in the way of health care’s transition to value-based care. Without better knowledge of which tests deliver true value, it’s hard for providers and health plans to use these amazing tools to their greatest effect.

If health care is to realize the full benefits of genetic tests, it needs a better way of managing how they are ordered.

It is difficult for health plans to determine the validity and coverage eligibility for genetic tests due to a lack of specific test identification. Legacy payment and prior authorization approaches are no longer sufficient since they cannot identify test appropriateness based on the latest science and evidence-based medicine, with the result that too many tests are ordered and too frequently.

Health plans and physicians must find a new solution to ensure genetic test quality and utility. To improve patient care, payers must be early adopters of managing genetic testing through the use of precise codes that identify tests combined with scientifically based policies and a fully automated claims review.

Today, tests are created faster than new codes can be assigned to identify them, so a wide range of genetic testing is lumped under one nondescript Current Procedural Terminology (CPT) code. While some genetic tests can be ordered using highly specific codes that are applicable only to a single gene or analyte, many other tests are handled under that catch-all CPT 81479 code. There are more than 40,000 different tests associated with that single code.

Because CPT codes lack the specific test identification needed to enforce coverage policy rules and maximize efficiencies, a proven solution requires three components:

1. Precise codes: Incorporating precise codes, which are more than a simple classification catalog, into genetic test management offers a proven, scalable quality component.
2. Evidence-based policies: Specialized codes must be coupled with quality assurance policies, designed by an independent clinical board, and based on a scientific review that includes analytical and clinical validity and utility.
3. Automated or expedited claim review: National Committee for Quality Assurance-accredited delegated Prior Authorization processes, which leverage policy enforcement technology with the precise codes automated in the platform, align payer reimbursement with authorization and minimize abrasion for health care plans and their members.

The Centers for Medicare & Medicaid Services and some commercial health plans are now transforming the management of genetic testing through code specificity and payer reimbursement and authorization alignment. Our audits of plans covering a total of 38 million members have found these organizations are reporting estimated cost savings of 9% to 20% in outpatient lab benefits, as well as increases in clinical outcomes and market competitiveness — all important to achieving value-based care success. The predicted savings for a plan is 50 cents to 65 cents per member per month for genetic testing.

Science and clinical advancement will continue to drive growth in genetic testing, which will become more sophisticated and complex. But genetic tests will become part of routine wellness exams in the future, and more people will want access to the information to guide their personalized care.

Ensuring the right test is ordered to produce the right data and intelligence to inform the right care requires the continued transformation of the management of genetic testing.

Jason Bush, Ph.D., is executive vice president of product for Avalon Healthcare Solutions. He has more than 20 years of experience in leadership positions in venture capital-backed health care and life sciences companies.