A recent comprehensive study conducted by researchers at Georgetown University has unveiled a paradoxical trend in the utilization and reimbursement landscape of next-generation sequencing (NGS) for cancer patients under Medicare. Despite the establishment of a national coverage determination (NCD) aimed at standardizing and clarifying reimbursement policies for NGS tests, the use of this advanced genomic testing has surged significantly between 2016 and 2021, accompanied by a surprising increase in claim denials. This nuanced dynamic suggests that while precision oncology continues to advance clinically, financial and administrative barriers may be expanding, complicating access and affordability for Medicare beneficiaries.
Next-generation sequencing, a revolutionary technology in oncogenomics, enables the simultaneous analysis of numerous tumor genetic markers. By decoding mutations across multiple genes, NGS facilitates targeted therapeutic strategies tailored to unique molecular profiles of cancer. Its potential to radically improve treatment specificity and efficacy underpins growing enthusiasm across oncology disciplines. However, the integration of NGS into routine clinical workflows is complex, especially within the constraints of insurance coverage frameworks that must evolve to accommodate rapidly emerging technologies.
In 2018, Medicare issued the first-ever national coverage determination specifically addressing NGS in cancer care. This policy was intended to harmonize reimbursement criteria and reduce uncertainty over whether NGS tests would be covered under Medicare fee-for-service plans. The NCD designated coverage standards for patients with advanced cancers, aiming to incentivize appropriate use of NGS while curbing unnecessary testing that could raise healthcare costs without clinical benefit. Further refinement occurred in 2020, when the policy was amended to cover hereditary mutations associated with breast and ovarian cancers, reflecting expanding clinical recognition of genetic predispositions in cancer management.
The recent analysis, funded by the National Cancer Institute, undertaken by Georgetown researchers and collaborators at Johns Hopkins Bloomberg School of Public Health, interrogated nearly 30,000 cancer-related NGS claims submitted on behalf of close to 25,000 unique Medicare beneficiaries from a 20% representative sample. Their findings reveal a near fivefold increase in the volume of NGS claims over five years, signaling rapid adoption of these genomic tests despite lingering coverage and reimbursement complexities. However, alongside this growth, denial rates of claims also escalated sharply, rising from 16.8% before the initial NCD to 27.4% following the 2020 amendment.
Several hypotheses emerge to explain this counterintuitive rise in denial rates concurrent with expanded coverage. One possibility is that healthcare providers may have been slow or uneven in aligning their ordering patterns with the evolving Medicare coverage policies, leading to submissions that fall outside stipulated criteria. Additionally, discrepancies between clinical treatment guidelines and the specifics of coverage policies may create gray zones that reimbursement adjudicators interpret restrictively. Moreover, the current NCD does not comprehensively address all clinical scenarios in which NGS may be performed, leaving uncertainty regarding coverage for certain indications.
The research also highlights the influence of the testing context on reimbursement outcomes. Claims for NGS tests performed in independent laboratories were nearly twice as likely to be denied compared to those conducted within hospital settings, although the underlying causes remain unclear. Approximately half of the claims originated from outside hospitals, underscoring the decentralized nature of genomic testing services. This phenomenon raises questions about differences in billing practices, coding accuracy, or insurer scrutiny between inpatient and outpatient or independent testing facilities.
Test complexity emerged as another critical factor influencing reimbursement. Claims submitted for NGS panels analyzing 50 or more genes exhibited an approximately threefold higher likelihood of denial relative to smaller gene panels. This suggests that the breadth of genetic interrogation, while potentially offering richer clinical insights, poses coverage challenges as payers grapple with balancing innovative precision diagnostics against cost containment and evidentiary standards for clinical utility.
Financially, the ramifications for patients and providers are significant. The median charge of denied NGS claims was $3,800, representing the upper threshold of potential out-of-pocket liabilities or the financial risk borne by clinicians or institutions. Crucially, when NGS is officially covered under Medicare, beneficiaries face no direct payment burden, highlighting how coverage decisions profoundly affect patient access to these cutting-edge diagnostic tools.
Despite the escalating costs observed with increased NGS use, critical questions remain regarding the value proposition of precision genomic testing in oncology. Specifically, it remains to be determined whether broader application of NGS leads to downstream reductions in total healthcare expenditures via improved diagnostic accuracy, more effective targeted therapies, and avoidance of ineffective treatments. Addressing these questions is vital for health systems and policymakers aiming to ensure sustainable integration of precision medicine into routine cancer care.
Assistant Professor So-Yeon Kang, the study’s lead author and an expert in health management and policy, emphasizes the continued uncertainty surrounding NGS coverage despite national policy efforts. Kang calls for intensified initiatives to clarify reimbursement criteria and to educate stakeholders about the potential financial consequences of NGS testing decisions, aiming to mitigate unwarranted claim denials and facilitate equitable patient access.
Beyond reimbursement dynamics, the study raises broader considerations about the pace at which advanced diagnostic technologies like NGS are assimilated into clinical practice, insurance frameworks, and health economics. This integration requires ongoing collaboration among clinicians, payers, regulators, and researchers to establish evidence-based, patient-centered policies that align financial incentives with improved outcomes.
Looking forward, Kang and colleagues plan to delve deeper into the economic and clinical impacts of precision oncology through further funded research. Their forthcoming investigations seek to quantify the value of NGS-guided cancer care in real-world settings, assessing how genomic insights influence treatment decisions, survival outcomes, and healthcare resource utilization. Such knowledge is essential to shaping policy initiatives that balance innovation, cost, and quality in cancer management.
The upward trend in NGS utilization, paired with increased claim denials, underscores a critical inflection point in the evolution of precision medicine. As more comprehensive NGS panels supplant traditional, lower-cost diagnostic methods, stakeholders must grapple with defining appropriate use criteria and reimbursement models that reflect the nuanced trade-offs between diagnostic thoroughness and economic feasibility.
In sum, this study illuminates the complex interplay between technological progress, clinical guidelines, insurance policies, and patient access in the rapidly advancing field of cancer genomics. While expanded Medicare coverage marks an important step forward, persistent uncertainties and financial hurdles highlight the need for continued refinement of coverage policies and stakeholder education to fully realize the promise of next-generation sequencing in transforming cancer care.
Subject of Research: People
Article Title: Claim Denials for Cancer-Related Next Generation Sequencing in Medicare
News Publication Date: 18-Apr-2025
Keywords: Genetic testing, Economics research
