The Breakthrough Machine: How CMS Coding Represses Molecular Biological Testing (Part I)

The Breakthrough Machine: How CMS Coding Represses Molecular Biological Testing (Part I)

This series will examine how breakthroughs in the technologies used in medical research are revolutionizing healthcare. We will start with Molecular Biology, where advances in the technologies aiding research are allowing scientists to operate at the molecular level, and work with small “machines” in the cell that do so much to regulate our health.

Molecular Biology Testing Laboratories

Molecular biology labs are full of strange equipment: cold rooms, sterile areas with laminar flow, dark rooms, autoclaves, Milli-Q water systems, dry ice, liquid nitrogen, fluorescence microscopes, confocal microscopes (which produce 3D images), and electron microscopes offering high-resolution images of sub-cellular structures.

The main techniques used in molecular biology these days are cloning, polymerase chain reaction (PCR), nucleic acid electrophoresis, DNA microarray analysis, in situ hybridization (HIS), and Sanger or Next Generation Sequencing (NGS).

Molecular diagnostics use DNA or RNA and include biomarker tests, genetic tests, analysis of tumors, liquid biopsies, PCR, isothermal amplification reaction, gene chip technologies, high-throughput sequencing, DNA microarrays (which are sort of a combination of microchips and laboratory testing), and the enzyme-linked immunosorbent assay (ELISA), which finds antibodies, antigens, proteins, and hormones from body fluids. These tests are crucial in finding infectious diseases.

Biological Molecular Testing as an Industry

Molecular testing is a growth industry. According to, the global laboratory equipment market is anticipated to grow from $37.39 billion in 2024 to $58.05 billion by 2029, a compound annual growth rate (CAGR) of 9.2 percent. Precedence Research says that the global molecular biology enzymes market size is expected to increase from $17.95 billion in 2023 to $65.63 billion by 2033, with a CAGR of 13.86 percent. Others report the market for molecular biological reagents will grow from $10.7 billion in 2022 to $22.2 billion in 2032, a CAGR of 7.5 percent.

The global molecular diagnostics market is forecast to grow from $14.75 billion in 2022 to $48.9 billion by 2030, a CAGR of 16.16 percent.

CMS and Revised Coding of Molecular Biological Testing

Of course, the Centers for Medicare & Medicaid Services (CMS) has complex billing and coding rules for molecular pathology and genetic testing. There was a major reform about 10 years ago. Now there are only four subgroups of CPT® codes. These include the following:

  1. Genomic Sequencing Procedures;
  2. Multi-Analyte[1] with Algorithmic Analyses (MAAAs);
  3. Proprietary Laboratory Analyses (PLA codes); and
  4. Tier 1 – Analyte Specific codes and Tier 2 – Rare disease and low-volume molecular pathology services.

According to CMS, there still are problems with billing of multiple CPT codes for some specific tests, particularly in the “Tier 2” group.

Molecular Testing Excluded from Reimbursement

Many applications of molecular pathology testing are not covered services, such as preventive services or screening for a genetic abnormality in the absence of a suspicion of disease. Testing may be considered not medically reasonable and necessary because of supposed poor quality of clinical evidence and strength of recommendation, or when the results would not reasonably be used in treatment. Molecular pathology procedures may be subject to medical records review.

Many important tests are not considered relevant to a Medicare beneficiary. For example, automatic claim denials are given for molecular pathology tests for diseases that manifest severe symptoms in newborns and early childhood, or that result in early death.

Many other tests are automatically excluded: any test that is given without visible symptoms of disease, determination of whether you can pass on to descendants a genetic disease, screening for hereditary cancer syndromes, prenatal diagnostic testing, tests to determine the risk of getting a disease, tests to determine the quality of a process, or any investigational test. Screening services such as pre-symptomatic genetic tests and services are not a Medicare benefit and are not covered.

Coding Changes Repress Reimbursements

Even for testing that is allowed, changes in coding and coverage make reimbursement uncertain for molecular pathology laboratories.

One study examined the record for two molecular oncology tests: the T-cell receptor (TCR) β rearrangement test and the Columbia Combined Cancer Panel (CCCP), a large (467-gene) cancer next-generation sequencing test.

In the 2013 reforms, stacked procedural terminology codes were changed to a Tier 1 code for the T-cell test, and a combination of Tier 1 & 2 for the Cancer Panel. A decrease in reimbursement of 61 percent was observed for the TCR test, followed by an increase in rejection rates. The Cancer Panel test showed a 48-percent drop in reimbursements, and a sharp increase in rejection rates over time.

This is only one example of how changes in coding decrease reimbursements.

The United States Needs Universal Testing for Everyone

With the continuing advancements in molecular biology testing, we are sure to see a reduction in costs and more efficiencies in testing. But government policy is still a nitpicking affair, in which changes in the coding regime appear designed to take payments away from the testing laboratories. The result of this is less testing, poorer healthcare providers, and a drag on innovation, characteristic of countries that do not perform sufficient research and development (R&D).

Remember during the COVID-19 crisis, when the testing kits were given away to citizens, and the number of tests was in the hundreds of millions? 

Has anyone considered a national testing program that would give each person when they are pre-teenagers a comprehensive battery of genetic testing, and then use this information to create a lifelong health plan tailored for each individual? It would tell them what diseases they are vulnerable to, and make suggestions about how to take care of their health, e.g., dietary restrictions, exercise regime, and many other factors. Many such suggestions already are available from commercial DNA testing services that many persons use to trace their ancestry.

It would also be useful if the health monitoring systems associated these days with mobile phones or smart watches could be accessed for each citizen, so that a lifetime of monitoring would be in place. Heart rate, blood pressure, body fat, amount of exercise, and all aspects of movement would be monitored, and artificial intelligence (AI) or even simple algorithms would provide suggestions for better behavior or advance warnings for unhealthy habits or other developments.

Of course, the naysayers would start by talking about cost and privacy, and even erupt into hysterics like “I don’t want an algorithm monitoring what I am doing 24-7.”

The world is filled with narrow-minded persons who do not see the benefits of a national proactive health service. In any case, at least in the United States, privacy is no longer a realistic pillar of public policy.

Nevertheless, many of these concerns could be addressed by providing discounts on insurance and other benefits. After all, healthcare is all about the money.


In Part II of this series Mr. Roche will examine the technologies that are revolutionizing neuroscience. 

[1] “Analyte” refers to what you are trying to identify or measure in the testing.

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Edward M. Roche, PhD, JD

Edward Roche is the director of scientific intelligence for Barraclough NY, LLC. Mr. Roche is also a member of the California Bar. Prior to his career in health law, he served as the chief research officer of the Gartner Group, a leading ICT advisory firm. He was chief scientist of the Concours Group, both leading IT consulting and research organizations. Mr. Roche is a member of the RACmonitor editorial board as an investigative reporter and is a popular panelist on Monitor Mondays.

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