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Tempest in the Melting Pot: Genomics Reimbursement in 2012

November 2, 2011

Introduction

The core set of genetic test codes used by U.S. insurers and Medicare date to 1993. Only general information is conveyed by these codes to insurers – “DNA probe x 2.” They lead to payment for genetic tests based on a fixed price per genetic test step (such as “DNA probe x 2” or “DNA amplification x 3”). The payment was set using rules for the Medicare clinical laboratory fee schedule, rules which date to 1984.

As genetic and genomic tests have rapidly become more common in the past decade, it has been widely recognized that neither the coding nor pricing system are very satisfactory. At least in retrospect, the problems that developed were predictable given the available systems, assumptions, rules, and stakeholders. However, the complexity of stakeholder positions is daunting and bears no relationship to the Spartan simplicity of the coding and pricing rules that are undergoing long-delayed and striking change. Some of the likely outcomes in the next two or there years can be forecast by study of the information already available. Writing in Fall 2011, some of the most decisive choices will be made in the next few quarters.

In this essay, we present a concise description of changes in molecular test reimbursement and illustrate the widening stresses between stakeholders in the current system. While the focus is on the present and the near future, the changes that are rapidly evolving are difficult to understand without realizing that decades-old regulations, political battles, and policy constraints are at play in the present. 

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