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National Association of Managed Care Physicians Fall Forum 2019

Navigating Challenges With Determining Value, Reimbursement of Genetic Testing

Jaime Rosenberg
During a session at the National Association of Managed Care Physicians 2019 Fall Managed Care Forum being held October 10-11 in Las Vegas, Nevada, Kathryn Phillips, PhD, founding director of the University of California, San Francisco Center for Translational and Policy Research on Personalized Medicine (TRANSPERS), discussed the emergence and rise of genetic testing, the challenges of determining value and reimbursement, and what’s ahead for these tests.
During a session at the National Association of Managed Care Physicians 2019 Fall Managed Care Forum being held October 10-11 in Las Vegas, Nevada, Kathryn Phillips, PhD, founding director of the University of California, San Francisco Center for Translational and Policy Research on Personalized Medicine (TRANSPERS), discussed the emergence and rise of genetic testing, the challenges of determining value and reimbursement, and what’s ahead for these tests.

“Precision medicine is here to stay,” said Phillips, who began by painting a picture of the current genetic testing market:
  • There are genetic tests available for 11,000 conditions, 132 drugs note genetic markers in their labels to guide treatments, and 42% of drugs in the pipeline include genetic markers.
  • Testing is evolving: There’s been a move from single-gene testing to gene panels to whole-exome sequencing to whole-genome sequencing. There are also disease-specific testing and inherited/genome sequencing versus acquired/somatic sequencing.
  • There are currently 75,000 genetic tests on the market, 14% of which are multigene tests, and their prevalence is increasing rapidly.
  • The highest percentage of spending on genetic testing is spent on multigene panel tests and on prenatal and hereditary cancer risk testing.
Looking ahead, Phillips predicts that precision medicine and genetic testing will continue to grow in importance, use, and spending. But, the current challenges will continue, including limitations in the data and evidence, the high cost of some tests relative to benefits, and variable access to appropriate testing. Perhaps the most dauting challenge that will continue to face genetic testing is reimbursement, said Phillips.

Historically, payers have focused on medically necessary, non-experimental testing as criteria for coverage, which means that they assume a patient is being tested for one marker and for one reason, and that information will be used to act on something for that patient. Therefore, said Phillips, payers have wanted to see all measured genes having clinical utility.

However, this view has come in contact with several challenges, as there is a blurring of research use versus clinical use of these tests, a slippery slope of population-wide screening versus targeted testing, personal utility versus payer mandate, and concerns among payers that patients and providers don’t sufficiently understand benefits relative to limitations.

Phillips did note that we are seeing a paradigm shift in payer coverage for genetic testing. For example, in March last year, CMS finalized its National Coverage Determination (NCD) for next-generation sequencing tests for patients with advanced cancer.

Following pushback from most labs and patient advocates, who pointed out flaws in the NCD, including the fact that it would exclude coverage for early-stage patients with cancer, the NCD was subsequently reopened by CMS. A proposed memo is due later this month, and the new NCD is expected to be finalized by early next year.

Despite the setback, the move from CMS represents a coverage approach that would likely have “ripple effects with other payers and tests,” said Phillips. The NCD included coverage for companion diagnostics, with FDA approval and clearance of such tests being enough for automatic coverage. The NCD also said that if one gene met the requirement, the entire panel would be covered.

Will private payers follow CMS’ lead? According to Phillips, they often do not, and the NCD is inconsistent with many current policies and approaches to coverage. She added that there are several other questions that remain unanswered, including the downstream and long-term impact, as well as the impact on family members. And while panels might reduce costs by replacing sequential single-gene testing and offering more information, it’s important to be aware of the budget impact on an organization with the rise in utilization and costs of the large panels.


 
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