Apr 28th 2016

The 5th “R” of Personalized Medicine: Right Cost

According to a recent article published in Managed Care, health insurers are struggling to manage the number and cost of genetic tests.  With the increase in information due to the flood of new diagnostic forces, insurers are starting to ramp up prior authorization and utilization review.

Today's torrent of information around genetic and molecular markers for disease has outstripped the ability of physicians, health plans, and patients to know exactly what every new test means.  Part of the reason this is the case is because sometimes clinical labs introduce up to 10 new genetic lab tests per week. This number means that many plans are adopting prior authorization for genetic tests. 

Hiring utilization management vendors is one way that health plans are seeking to control the ballooning cost of genetic and molecular testing. The complexity of such tests involves much more than a yes-or-no answer, says Lon Castle, MD, chief of molecular genetics and personalized medicine at EviCore healthcare.  Genetic and molecular testing is the fastest growing segment of the lab market, and Castle says the best estimates are that it will generate $11 billion in sales this year for lab companies "and that's just molecular and genetic tests."

Genetic testing is becoming a major pain point for many plans.  The explosion of new information and testing is simply making it difficult for everyone to keep up. It is important to note, that while the volume is high, the overall spending on genetic testing is remaining relatively low at only about 10% of health insurers' total lab costs. This makes health plans reluctant to invest much money into managing it just yet.  However, the rate of increase is a point of concern, and is enough to motivate health plans to look into ways of managing genetic testing.

There are between 7,000 and 8,000 different tests today that can identify genetic variants, says Castle. But there are about 60,000 different testing products on the market for those variants because so many different labs have developed tests for the same variants, he says. Thousands of clinical labs in this country are introducing 8 to 10 tests every week, he figures. "If you're a health plan, that's a lot to keep up with," says Castle. And that's why insurers are outsourcing utilization management of genetic testing to companies like EviCore.

EviCore is like any other benefits manager in that it asks for evidence to determine the clinical validity and clinical utility of molecular and genetic tests.  But most genetic tests lack strong evidence from randomized clinical trials.  As a result, EviCore uses a two-step process to evaluate the evidence behind each test to determine if the test does what the lab says it will do, Castle explains.  First, EviCore uses a technique the CDC's Office of Public Health Genomics developed more than 10 years ago called the ACCE Model Process. ACCE stands for analytics validity, clinical validity, clinical utility, and associated ethical, legal, and social implications.

The process involves 44 questions that, among other things, ask about the test's sensitivity, specificity, whether there is a remedy available for the disorder that might be identified, and whether there is access to that remedy. After determining clinical utility, EviCore evaluates whether the test is appropriate for that particular patient. The company wants to know if the test result will, in fact, inform or possibly change a physician's treatment decision. "We want to ensure that for any test once you get the result back, you will make a treatment decision that is either yes or no or left or right depending on the patient and the patient's condition," Castle explains. If the test legitimately informs a treatment decision, EviCore approves the test: "We're looking to manage inappropriate testing and not waste anyone's time getting clinical information and slowing the process for physicians or patients."

Currently, health insurers are having the most trouble with coverage decisions about panels of tests that may include assays for 25 to 50 genetic variants or more. With any panel of tests, EviCore seeks to ensure that it meets the standards established by the American College of Molecular Genetics (ACMG). The ACMG has issued policy statements on genetic tests for Alzheimer's disease, breast cancer, cystic fibrosis, prenatal/preconception carrier screening, and Down syndrome, among others.

Different tests get different levels of scrutiny. The test for cystic fibrosis can cost $300 or more, notes Castle, but experience has shown that it's rarely ordered inappropriately so the review is usually routine. But the large panels for other conditions, such as general screening for cardiac conditions that involve 20 to 30 genes, tend to get examined more closely. "Sometimes there are genes in these panels that just don't have the clinical utility we're looking for," Castle says.

Discussion about large panels of 25 or more tests can get testy, Castle says. "Now, you're getting to where the science and the business side of lab testing clash a bit," he adds. That's because it's less expensive for labs to run a multitude of tests in one panel than to run separate tests for each gene variant. Labs developing large panels want to provide clinical answers for physicians treating patients while also collecting data on the incidence of gene variants in a population, Castle explains. They put together large panels for their own internal research to learn more about genetic variants. Understandably, health plans balk at paying for testing that benefits the lab and could have benefits for patients down the road but have little, if any, clinical utility at the moment.

To read the full article, please click here.