Molecular Testing – Why Is Reimbursement Lacking?

Molecular diagnostic assays are one of the fastest growing segments for clinical diagnostics. Advancements in testing capabilities allows for rapid determination by simultaneously assessing multiple genes, which for some patients will have life changing effects, by identification of low prevalence inherited and environmentally induced diseases, syndromes and conditions.

The advancements in testing capabilities are exciting for clinical outcomes, the unfortunate flip side of these advancements is the fact that the issuance of codes, guidelines and payer policies have not kept pace with the development of new technology (i.e., next generation sequencing [NGS]) or the rapid expansion of medically indicated use for gene-based test results. Further, there is a lag in recognition of medically indicated testing, pushing payers to classify the current technology for gene sequencing procedures (GSP) as “investigational” or “research only.”

The information gained is truly beneficial in further understanding previously unidentified or misunderstood diseases, syndromes and conditions, and provides useful information for increased treatment options and improved patient outcomes – so why is reimbursement lacking for this testing?

Application of Coding Logic

There is an industry-wide need to improve coding knowledge for DNA and RNA based testing. The published guidance for CPT codes is limited and does not provide sufficient rationale for the creation of the code, or it’s intended use. Accurate code selection requires review of multiple resources and correlation of information for labs to have any confidence in their billed claims, and with an overall lack of industry guidance to support coding accuracy – that confidence is difficult to have.

Codes Have Not Kept Up with Technology

CPT code options do not include all scenarios where multi-gene panels are available, and issuance of new codes has not kept pace with technology or the rapid expansion of medically indicated use for gene-based testing. Coding options are based on when genes are assessed either simultaneously or sequentially. New technology allows for simultaneous testing of multiple genes, but available code choices do not include many scenarios where multi-gene panels are available – leaving labs with no accurate option for CPT code assignment.

Denial of Payment

Labs that attempt to comply with payer expectations of sequential testing, or application of complex testing cascades, are challenged by the knowledge that sequential analysis can sometimes add weeks to reporting the results. Not to mention that codes may not be available for multi-gene panels, or payer coverage guidelines may be unclear. By applying the incorrect coding logic (stacking of CPT codes) to the simultaneous analysis of multiple genes (multi-gene panels), billed charges are inadvertently increased – resulting in either overpayment (and probably later recoupment) or denials.

Payer Recoupment Following Post-Payment Audits

In recent months (yes, even during the current public health emergency) payers have been auditing claims for DNA and RNA based testing dating back to 2014. To further complicate matters, these audits have been applying coding guidelines that were not published until 2019. The reasoning: an assumption that laboratories “should have understood” coding limitations, even though guidance was lacking or confusing.

Payer Policies are Out of Sync with Technology

Recent payer policies, NCCI policy statements and AMA coding guidelines are pushing labs to increased use of the unlisted molecular pathology – CPT code 81479. This could be the “kiss of death” for laboratories performing multi-gene sequencing procedures where all genes are analyzed simultaneously. Since the subsection for Molecular Pathology Tier 1/Tier 2 codes was introduced, CPT code 81479 has been the go-to for “undefined” genes or variants. The established MUE limitations have stipulated that the unit of service is limited to 1, regardless of the number of unlisted genes analyzed.  When the subsection for GSP was added, the coding options did not include an unlisted panel code option for billing of multi-gene panels.  Instead, labs have two options – 1. stack multiple Tier 1/Tier 2 CPT codes to represent codable genes/variants tested (which is not compliant); or 2. submit one unit of code 81479 – often resulting in $0.00 payment.

Another consequence of increased reporting of unlisted codes has significant implications for the future of molecular testing: use of the unlisted code complicates the ability to share details of the testing performed, masking cost data behind the limited description of an unlisted code. Laboratories and payers remain at odds over the hidden cost of this testing and payer resistance to reimbursements.

As testing continues to advance, the need for education and guidance is only becoming more urgent.

Check out this on-demand webinar consolidating the information you need to ensure confidence in your workflows and code selections for DNA and RNA based tests.