Happenings
Vast Diagnostic Testing Registry Simplifies Medicare Claims Process
Since the human genome was first sequenced in 2003, the field of genetic testing has expanded rapidly. In kind, Medicare Part B spending on genetic tests has grown 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 were laboratory developed tests (LDTs)—a type of test designed, validated and performed within a single laboratory. To submit claims for LDTs, a provider must identify each test with a code from the Current Procedural Terminology (CPT) or the Healthcare Common Procedure Coding System (HCPCS) that most accurately describes it.
Unfortunately, the limited number of codes available often do not provide an adequate level of detail about the service being performed, so providers are often contacted to submit additional documentation prior to claims adjudication. The scope and quality of LDTs also varies significantly from lab to lab, which complicates claims processing as most payors do not have processes and procedures in place to evaluate test legitimacy.
The Palmetto GBA Solution
To address this challenge, Palmetto GBA launched the MolDX program in 2011 as part of the Medicare Jurisdiction 11 (now Jurisdiction M) contract. Launched as a joint-operating agreement between four Medicare Administrative Contractors (MACs)—Palmetto GBA, Noridian, WPS Government Health Administrators and CGS Administrators—the program establishes policies, procedures and payor controls across 28 states. As the program administrator, Palmetto GBA operationalized the complex process by using the DEX® Diagnostics Exchange genetic testing registry. The program also began to set standards with unique policies and technical assessments of services in the field of molecular diagnostics, which were rare and relatively unknown at the time.
Since 2011, the field of molecular diagnostics has experienced tremendous growth and along with it myriad new LDTs. In fact, today DEX has more than 20,000 tests catalogued and Palmetto GBA’s Molecular Diagnostics team of highly skilled pathologists, geneticists, clinical laboratory scientists, project managers and administrators is a leader in the molecular diagnostics field. Together they are making significant contributions to the laboratory testing marketplace as it moves beyond Medicare into the commercial payor space.
Meeting the Demand with Unique Identifiers
As part of the Molecular Diagnostics program, a unique test identifier known as a Z-Code® is required to further define specific tests from each laboratory. When a Z-Code is reported with the appropriate CPT/HCPCS code, payors can identify the exact service performed. These Z-codes are registered and catalogued in the DEX registry platform. The Molecular Diagnostics team also performs technical assessments on all registered tests to ensure they meet quality standards and demonstrate clinical value.
The relative success of each test is determined by criteria established by policy or procedure. The results are collected in DEX to be used by payors using automated claims adjudication. Currently, the Molecular Diagnostics team evaluates 100 to 200 tests per month. In conjunction with this process, the team regularly provides education to the laboratory and physician community thereby elevating the standard of laboratory testing across the United States.
The Molecular Diagnostics team has worked closely with the DEX application development team on recent product upgrades that incorporate technical assessment results and rationales directly into the system. Together they created a classification scheme to categorize all tests and clearly define services that are applicable to the Medicare population and differentiate them 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 used by all MolDX MAC partners in making coverage and reimbursement determinations. This includes reimbursement rates as established by the Molecular Diagnostics team using an Equitable Pricing Model, 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 claims adjudication. They also 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. 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 use these services. The DEX registry is expected to expand and be used by additional payors in the future, highlighting the importance of the work performed by the Molecular Diagnostics and DEX Application Development teams at Palmetto GBA.
