Navigating the Complexities of Payment for Genetic Testing

In the rapidly evolving landscape of healthcare, the expansion of genetic testing stands out as a monumental leap forward. The field of genetic testing has grown exponentially over the past decade, with available tests skyrocketing from 10,000 in 2012 to over 175,000 today — a staggering 1650% increase with an estimated ten new tests introduced daily. And as the link between genetics and diseases is better understood, genetic testing is being applied across new specialties. While this diagnostics revolution holds immense potential to transform personalized medicine through early risk detection and personalized treatment plans, it also presents significant challenges –– particularly around payment accuracy.

Current challenges faced by health plans 

While the use of genetic testing surges, health plans grapple with challenges influencing appropriate spending, administrative costs, and operational efficiency. Some key issues include:

  • Manual review burden –– Although genetic tests account for only about 1% of all healthcare claims, they make up 15-20% of all medical services reviewed by health plans, such as prior authorizations and claim reviews, disproportionately straining resources and increasing administrative costs.
  • Disproportionate spend — Despite constituting only 10% of all tests, genetic tests account for 30% of lab-related spending, reflecting their high cost and increasing utilization.
  • Payment inaccuracy — The rapid pace of change in technology, expanding number of tests, and complexity of coding and billing processes pose challenges for both providers and insurers, leading to inaccurate claim and payment errors.
  • Fraud and abuse — The potential for fraud and abuse in genetic testing claims is a growing concern. In recent years, several high-profile cases have highlighted the need for more robust fraud detection and prevention measures.

As health plans struggle to keep pace with advancements in genetic testing, there is a pressing need for solutions to streamline processes, improve accuracy, and reduce administrative waste.

The power of strategic partnerships and specialized expertise 

To address genetic testing claims’ complexity, as well as aligning payment with appropriate rules and reimbursement methodology, health plans are increasingly partnering with specialized companies with applied expertise in this domain. These collaborations aim to bridge the gap between clinical knowledge and administrative processes, enabling payers to better navigate the intricacies of payment accuracy related to genetic testing. 

By leveraging the capabilities of specialized partners, health plans can access technologies such as AI-powered claims editing systems, which can identify and correct coding errors, detect potential fraud, and ensure compliance with evidence-based policies and guidelines. These solutions not only improve payment accuracy but also reduce the manual review burden on health plan staff.

Strategic partnerships also can help health plans stay ahead of the curve on policy development and provider education. Specialized companies often have dedicated clinical teams that continuously monitor the latest advancements and translate this knowledge into actionable insights. This includes developing policies around genetic testing administration and educating on test ordering and claim submission best practices.  

Recommended solutions for health plans 

To better manage genetic testing claims and improve overall outcomes, health plans should consider the following recommendations:

  • Adopt a genetic testing claims management solution that combines human-driven expertise and AI-driven prepaid editing capabilities to accurately identify genetic testing services, apply transparent rules based on policy content, and reduce administrative burdens and costs.
  • Use the solution to improve consistency in coding and billing, reduce prior authorization requirements, and lower administrative costs for all stakeholders.  
  • Detect and prevent fraud, waste, and abuse by identifying inappropriate coding practices and enabling quick responses to fraudulent activities.  
  • Enhance transparency and reduce provider friction with consistent, reliable, predictable, and transparent communications regarding coverage decisions for genetic testing services.

Collaboration, transparency, and innovation 

The key to success lies in fostering a collaborative ecosystem that prioritizes transparency, education, and innovation. Health plans, partners, and providers must work together to ensure that the benefits of genetic testing are realized while maintaining payment integrity, which ultimately benefits patients by giving them a clear understanding of not only of their clinical situation, but their financial obligation.

This collaboration should focus on developing clear, evidence-based policies for coverage and reimbursement: Investing in solutions to automate claims processing and fraud detection, educating providers, and ensuring transparency among all stakeholders. 

By embracing strategic partnerships and innovative solutions, health plans can manage the complexities of genetic testing claims while unlocking the immense potential of precision medicine to improve patient outcomes and drive healthcare transformation.

Photo by Flickr user Petra B. Fritz

Brian Berkowitz is the vice president of strategy & corporate development at Lyric, a health tech company dedicated to helping simplify the business of care. He leverages his deep, proven healthcare domain expertise and dynamic problem-solving skills to catalyze growth for the organization, which helps improve payment accuracy and integrity for eight of the nine top payers and many health plans covering more than 185 million individuals.

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