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Complexity of Genetic Testing Affects
Payment Integrity for Health Plans

Ordering large multi-gene panel tests has increasingly become a common practice. Coupled with a limited amount of genetic testing billing codes and widely varying lab billing practices, this tactic leads to health plans overpaying for these tests. In this blog, Kelle Steenblock, vice president, payment integrity, answers common questions posed by medical directors and claims management and payment integrity leaders at health plans.

Q: What makes genetic test claims challenging to analyze and adjudicate?

A: Currently, there are only about 400 procedure codes for more than 75,000 genetic tests in the market — this problem is only getting worse as the number of tests entering the market is growing by 10+ weekly. While the American Medical Association is creating more CPT® codes with a 1:1 relationship between codes and tests, there are thousands of tests that don’t have an appropriate code. It has also become common to bundle testing codes, which creates  significant variability in billing across labs. All genetic test marketof this, combined with the fact that genetic testing claims are difficult to understand without the counsel of genetics experts, engenders a lack of transparency and significant variability in health plan payments. In our research, we have found that as many as 30% of genetic testing claims are coded inaccurately.

Q: Why would a health plan need a payment integrity solution for genetic testing if they already have a prior authorization solution in place?

A: Prior authorization definitely helps to reduce clinically unnecessary genetic testing, but it doesn’t address the wide variability in laboratory billing for complex genetic tests.  A payment integrity solution addresses these inconsistencies by identifying variable coding in the claims environment and applying edits consistent with the medical policy to prevent inappropriate payment for genetic tests. Combining prior authorization with payment integrity ensures closure of these important and costly gaps.

Q: What are some common areas for genetic test savings that have utilized claims edits?

A: It can vary across tests, but we’ve noticed a pattern of abuse in several types of tests. Here are just three of many examples that we’ve uncovered in our work with health plans:

  • Pharmacogenomics tests: $12.9M allowed by one plan for unnecessary claims
  • Cystic fibrosis tests: 10-20x variance in allowed amount for this single type of test
  • Reproductive tests: 34% decrease in spend pre-versus-post claims edits

A payment integrity solution can address all three of these areas of inappropriate spend with one expert approach.

Q: What is the best way for a health plan to determine if there’s a problem with inappropriate or overpayments of genetic testing claims?

A: Analyzing genetic claims data helps health plans determine their spend on genetic testing, which areas have increased over time, and which areas are most amenable to a claims editing solution. Because the coding of genetic testing claims is so complex, having genetics expertise to perform the analysis is important. In the absence of the appropriate expertise, claims management staff can spend more than two hours reviewing each genetic testing claim. Once spending trends are identified, extensive policy review by genetics experts lets health plans see where payment policies can be applied in the claims environment to eliminate inaccurate or overpayments.

The review and identification of appropriate genetic testing claims payments can be incredibly complex. If any of this information made you wonder about your own plan’s possible inappropriate or overpayments, we invite you to do two things:

1. Stay posted for part two in this series where we will continue this Q&A with Kelle and her team about important aspects of payment integrity for genetic testing.

2. Request a free savings analysis for your health plan. InformedDNA can determine the savings potential of a genetic testing payment integrity solution for your organization — at no cost. We’ll perform detailed claims analyses to identify overbilling-and estimate how much your plan could save from our solution.

The process is simple:

  • Submit the short form below.
  • We’ll schedule a brief meeting with you to gather information about your plan and its genetic test claims challenges.
  • We’ll then send you our Claims Data Submission Spec that details the data we’ll need in order to perform a savings analysis.
  • After receiving your data, we’ll perform the analysis which will summarize your genetic testing spend trends and potential for savings utilizing our payment integrity products. We’ll get the analysis back to you in approximately 2-3 weeks.
  • We’ll set up a meeting with your team and ours to share the analysis results and answer any questions you have.

View our AHIP webinar on Genetic Test Payment Integrity

With the nation’s largest and most experienced staff of lab-independent genetics specialists, InformedDNA enables health plans to stay ahead of the curve by augmenting a plan’s in-house team with comprehensive clinical genetics expertise, including pre- and post-test services. We empower health plans to promote precision medicine, optimize spending, and avoid unnecessary and unpleasant experiences for members and providers.

Request a complimentary genetic testing spend savings analysis for your plan: