NEW YORK – More than a dozen US states have enacted legislation requiring broad insurance coverage for biomarker tests, but commercial payors are finding it difficult to figure out how they should adjust their policies to comply with these laws.
While they aim to increase biomarker test coverage for patients, their broad language could have unintended consequences that increase healthcare spending and widen disparities, some reimbursement experts argued last week during an expert panel discussion hosted by Concert Genetics, a health technology company that provides solutions for tracking and managing genetic test utilization. State biomarker test coverage laws are "one of the biggest high-profile issues in the precision diagnostics space today," Erik Schulwolf, an associate at the law firm Foley Hoag who works with molecular diagnostics labs on reimbursement issues, said during the webcast event.
One of the oft-cited barriers to precision medicine is reimbursement. Although the list of US Food and Drug Administration-approved biomarker-informed therapies continues to grow, in many cases biomarker testing identifies treatment strategies that have emerging evidence but are considered off-label or investigational. Getting payors to cover treatments and tests in such cases is challenging. And even though Medicare reimbursement for molecular testing has improved in recent years, for example, with the national coverage determination (NCD) for next-generation sequencing tests for directing cancer therapy, patients and doctors still find it difficult to navigate commercial payors' policies and spend a lot of time on appeals and prior authorizations.
The American Cancer Society Cancer Action Network (ACS CAN), hoping to reduce insurance barriers and improve biomarker test access for those with cancer, the disease area most impacted by precision medicine advances, has sponsored bills in states around the country to try to bring more consistency to the reimbursement process. "People of color, individuals with limited income, and rural residents are less likely to receive biomarker testing," Autumn Ogden-Smith, California legislative director for ACS CAN, said in a statement earlier this month announcing the enactment of a biomarker test coverage bill in California. "Improving coverage for biomarker testing across insurance types prevents patients from being forced to pay out-of-pocket, incur debt, or go without this game-changing testing, and is fundamental to reducing health disparities as precision medicine grows."
In addition to California, 13 other states — Arizona, Arkansas, Georgia, Illinois, Kentucky, Louisiana, Maryland, Minnesota, Nevada, New Mexico, Oklahoma, Rhode Island, and Texas — have similar laws, and bills are being introduced in other states. "We do expect [legislative] activity to pick up … in 2024," Schulwolf said, pointing out that these efforts to improve biomarker test access for patients don't appear to be ideologically divisive since the bills have support in both red and blue states.
Broadly, the enacted bills require commercial health plans, and also Medicaid in some states, to cover biomarker tests for diagnosing, treating, managing, or monitoring patients if they meet certain evidentiary criteria. At a more granular level, the laws have notable differences. For example, two states seem to be limited to biomarker tests for cancer, while others have a very permissive definition of biomarker testing, including tests in any disease setting. Importantly, the bills aren't aligned in their definition of evidence-based testing and enumerate different evidentiary sources that payors must consider in making a coverage determination.
The California law, for example, states that in determining test coverage, health plans must consider whether it is indicated to guide an FDA-approved therapy or has an FDA-approved indication; if it has an NCD from the US Centers for Medicare & Medicaid Services or a local coverage determination (LCD) from a Medicare administrative contractor (MAC) for California; if its use is supported by published, evidence-based clinical practice guidelines; or if it meets standards set by the National Academy of Medicine. The Illinois law, in contrast, is broader in some ways in requiring health plans to also consider evidence from consensus statements, professional society recommendations, peer-reviewed literature, and biomedical compendia, but doesn't mention LCDs.
"We're in very early days" of implementing the requirements in these laws, Schulwolf observed, but he suspects that labs, payors, and patient groups are carefully parsing the words in these state statutes and may arrive at different interpretations. Some payors, for example, may interpret these laws as not actually requiring them to cover tests that meet one of the noted evidentiary requirements, he said, but as being "just required to consider these evidentiary categories in performing independent evidence reviews."
These bills "started from a good place" in that they were aimed at removing barriers for cancer patients who needed testing to get on the right drug, recalled Judy Mouchawar, medical director at the Blue Cross Blue Shield Association (BCBSA). "But it grew and grew" to where the bills now define biomarker testing very broadly, making it difficult for plans to implement the changes stipulated by the law, she said.
Larry Simon, a pediatric otolaryngologist by training and managing medical director for medical policy and medical appeals at BCBS of Louisiana, characterized the state laws as "legislating clinical utility" by enumerating what evidence insurers must consider in making coverage decisions. "You're restricting to a certain degree the ability of plans to make an independent assessment of the evidence, which can be very important in ensuring that the plans are able to fulfill their fiduciary obligations to their policyholders and members," said Simon, who along with other speakers at the Concert Genetics event said their comments and views aren't representative of their employers' official positions on these bills.
Payors looking to comply with the laws based on the enumerated evidentiary sources may run into difficulty when a test has Medicare coverage, for example, but isn't approved by the FDA or supported by guidelines or published data. "You do run into some of those problems when the stars don't align between FDA, CMS, guidelines, literature, or competing guidelines," Simon said. "The National Comprehensive Cancer Network may have something that's different than the American Society of Clinical Oncology, and what would you do in those situations?"
The wording in state laws about LCDs may be another source of confusion. For example, California's law specifies that commercial payors and Medicaid must consider LCDs issued by a MAC with jurisdiction in the state. In such scenarios, a commercial plan may refuse to cover a test under an LCD from an out-of-state MAC, Schulwolf speculated.
Things could get even murkier when one considers MolDx, a program that conducts evidence reviews for molecular tests and determines Medicare coverage. MolDx's coverage determinations are adopted by four Medicare contractors: Noridian, which has jurisdiction over California labs; Palmetto; WPS Government Health Administrators; and CGS Administrators.
"If you have an LCD from a non-MolDx MAC, would that trigger coverage under the California biomarker law?" Schulwolf wondered. If it doesn't, then "labs may have a fairly strong response to that, especially when it comes to these sole-source tests," — tests performed by a single lab. Such tests are covered under one MAC's LCD, but that policy applies to Medicare beneficiaries nationwide. A lab "might argue that even if [it is] located in Pennsylvania or Maryland and [its] test is covered by [contractor] Novitas, that coverage policy is the one that applies to beneficiaries located in California," Schulwolf said.
One of the aspirations of the laws, he pointed out, was to make biomarker test coverage more consistent. For example, if MolDx has determined that a test has sufficient evidence supporting "medical necessity" for Medicare coverage, then there may be an expectation under these laws that commercial plans should also be covering them. "In some respects, one of the objectives of doing it that way was to make life easier for the plans," he said, noting that as MolDx has issued more and more coverage policies on molecular tests in recent years, commercial plans have lagged behind.
Simon said he "strongly disagreed" with the view that commercial payors should follow MACs coverage determinations. That assumes that the MAC got it right, and "that's just not a leap that I can make," he said, asserting that these bills essentially lead to a system that makes MolDx the "de facto decider of biomarker coverage nationally" and give too much power to one organization.
Schulwolf retorted that the bills evolved partly from the lack of transparency around commercial payors' biomarker test coverage decisions. "Stakeholders that pushed for these legislations came to state legislators with the argument that, 'Hey, there are all these tests. These tests are FDA approved. Some of these tests are covered for the Medicare population based on a fairly extensive evidence review … and yet, in some cases these tests are simply not being covered and blanket determined to be investigational and experimental by commercial plans,'" Schulwolf said, adding that supporters of the bills feel there needs to be a standard set of rules for test coverage.
In contrast, Simon maintained that the present system, where payors have the flexibility to review the evidence and arrive at different coverage determinations, which beneficiaries can appeal, spurs scientific debate and leads to better coverage policies over the long run. Requiring commercial payors to cover tests with NCDs and LCDs can have undesired ends, in his view, especially since government and commercial payors have different structures, missions, and mechanisms for funding covered services.
As part of a cost impact analysis conducted alongside Maryland's biomarker test coverage bill that was enacted in May, the Department of Health estimated that up to 25 percent of Medicaid enrollees may get biomarker testing, costing the state $429.6 million annually. The Maryland Department of Legislative Services noted that the spending on biomarker testing would likely be offset by savings from avoiding ineffective or unsafe treatments but couldn't reliably estimate the savings. Simon felt these expenditure estimates are concerning, and stakeholders should be considering carefully how to best use finite resources at a time when state budgets are strained and families are struggling to make ends meet.
Mouchawar pointed out that these budget estimates don't account for the cost of downstream testing that might be triggered by the initial biomarker test, and family cascade testing following a positive result from a germline genetic test. Primary care doctors may have to deal with increasing demand for testing from their patients in light of these laws, she said, adding that "the costs can really become untenable quickly."
She further worried that the state bills could potentially lead to coverage of investigational tests that enable patients to get unproven drugs that cause harm. At BCBSA, which is not a health plan but works with the 34 Blues plans on different issues including implementing the latest biomarker testing laws, there's been a lot of discussion about how to uphold the spirit of these laws while also ensuring evidence-based medicine and patient safety, Mouchawar said.
Suzanne Belinson, who joined molecular testing firm Tempus in 2018 as VP of commercial markets after spending nearly a decade at BCBSA, said that while she wants tests to be covered, she also believes payors must be able to independently control utilization of healthcare services, particularly amid rising costs. Given her background in the payor space, Belinson said her "default position" is "we shouldn't be legislating healthcare in this way."
But even in her current lab industry role, she said she didn't find the state bills particularly helpful. "Everybody is spending a considerable amount of time and resources figuring out how you potentially get around the law," Belinson said, suggesting that it might be better to put that energy into aligning stakeholders on what evidence should be considered for test coverage. Belinson and Mouchawar underscored that future bills could benefit from more specificity about the types of tests covered and greater clarity on the evidence requirements.
State laws and bills under development may be unclear in some respects but not unworkable, Schulwolf argued. "I've almost never seen a bill that's passed into law that doesn't have holes that can be poked in it in terms of scope, wording, and the potential things it might do," he said. But he agreed that given the momentum behind these bills, it is now imperative that labs selling biomarker tests, insurers, and patient groups work with state policymakers to clarify standards for coverage and uncertainties in the law, like LCD jurisdiction.
Simon also hopes that the questions raised by these bills and laws can be resolved between stakeholders or through future clarifying legislation, "and not end up in courts."
One positive impact of these laws, several experts noted, is that they have spurred payors to do more in-depth evidence reviews for biomarker tests. "I just worry about the prescriptive nature of it, in terms of how tightly plans get handcuffed with their ability to innovate," Simon said.
In the biomarker testing space, the evidence base is evolving rapidly, and in many cases, there is still uncertainty, Simon said, as to how to apply test results to patient care. There's also a lot of confusion, he noted, in terms of which utilization codes labs should submit for payment to Medicare, leading to significant variability in payment for biomarker tests. In this environment, "there's concern that [coverage] mandates might be a little premature," Simon said, wondering, "Is the marketplace ready for this kind of mandate?"