Happenings
Innovation and Standardization for Molecular Diagnostic Testing
Palmetto GBA launched the MolDX program in 2011 as part of the Medicare Jurisdiction 11 (now Jurisdiction M) contract that paved the way for a leadership role in molecular testing and precision medicine innovation. The program launched as a joint-operating agreement between four Medicare Administrative Contractors (MACs) covering seven jurisdictions; Palmetto GBA, Noridian, WPS Government Health Administrators, and CGS Administrators, to share the same policies, procedures, and payor controls across twenty-eight states. Palmetto GBA was the administrator of the program and operationalized the complex work with the deployment of a genetic testing registry called DEX® (Diagnostics Exchange). The program also began to set standards with unique policies and technical assessments (TAs) of services in the field of molecular diagnostics, which were rare and relatively unknown at the time.
A lot has changed since 2011, not the least being the tremendous growth in the most advanced field of medicine. Now, with more than twenty-thousand laboratory tests cataloged in a robust, proprietary software platform and a highly skilled and trained team of pathologists, geneticists, clinical laboratory scientists and project managers and administrators, the Molecular Diagnostic team is a leader in the molecular diagnostics field and is making significant contributions to the laboratory testing marketplace as it moves beyond Medicare into the commercial payor space.
The Challenges of Clinical Molecular Diagnostic Testing
Since the sequencing of the human genome in 2003, the field of genetic testing has grown rapidly, especially in the past decade. Medicare Part B spending on genetic tests grew from $473 million in 2017 to $1.9 billion in 2021, accounting for 20 percent of all lab tests that year.1 A majority of these are known as laboratory developed tests (LDTs). LDTs are developed, validated, and performed by the laboratories themselves. It is estimated that 50,000-150,000 LDTs are currently being performed in the United States. When submitting claims for these services, a provider must use the CPT and/or HCPCS code that most accurately describes the test being performed. However, there are only about 500 codes to represent these diverse tests and although many of the codes have descriptions, these descriptions do not identify the specific LDT from each lab. Therefore, additional documentation is often required to process claims. In addition, there is significant variability in the scope and quality of LDT offerings from lab to lab and most payors do not have processes and procedures in place to be able to evaluate test legitimacy.
Meeting the Demand with the DEX Registry
As part of the Molecular Diagnostics program, a unique identifier known as a Z-Code® is required to further define specific tests from each laboratory. When reported together with the appropriate CPT/HCPCS code, a Z-Code allows payors to immediately identify the exact service that was performed. These Z-codes are registered and catalogued in the DEX Registry platform. The Molecular Diagnostics team at Palmetto GBA performs TAs on all registered tests to ensure that a test is of sufficient quality and has demonstrated clinical value. To this end, the team has developed processes and procedures to evaluate the vastly complex and diverse landscape of molecular diagnostic tests in terms of their analytical validity (AV), clinical validity (CV) and clinical utility (CU). The assessment of each test is determined to be successful or not successful based on criteria established by policy or procedure, and these results are collected in DEX to be used by payors for automated claims adjudication. Currently, the team evaluates 100-200 tests per month at various levels of complexity. In conjunction with this process, the team regularly provides education to the laboratory and physician community that serves to elevate the standard of laboratory testing across the United States.
The Molecular Diagnostics team has worked closely with the DEX application development team and has made recent upgrades to the product to include incorporation of TA results and rationales directly into the system, creating a classification scheme to categorize all tests, and clearly defining services that are applicable to the Medicare population from those that are not. These and other features continue to streamline automation of the process originally developed for MolDX.
DEX Services Improve Laboratory Payor Controls and Reimbursement
The test information stored in the DEX catalogue is currently utilized by all MolDx MAC partners in making coverage and reimbursement determinations. This also includes the adoption of reimbursement rates for tests determined by the Molecular Diagnostics team using an Equitable Pricing Model (EPM), a proprietary algorithm developed at Palmetto GBA to minimize arbitrary pricing and ensure pay rates for molecular diagnostic tests are fair and equitable across all providers.
Under Dr. Gabriel Bien-Willner’s leadership since 2018, the Molecular Diagnostics team has established new processes, procedures, and controls to aid in claims adjudication and adapted the system to be fully automated and scalable, setting the groundwork to expand access and services beyond Medicare. This has involved engaging in strategic partnerships with private payors. For example, Optum currently licenses the DEX Registry’s tests, coding, and pricing information to commercial payors, following the standardized model initially created by the MolDx program. In 2023, UnitedHealthcare®’s Medicare Advantage program was the first to utilize these services. It is anticipated that the DEX registry will continue to expand and be utilized by additional payors in the future highlighting the import of the work performed by the Molecular Diagnostic and DEX Application Development teams at Palmetto GBA.
