How Test Reimbursement Decisions Are Made: A Leader of Medicare's MolDX Program Discusses Evaluation Process

Oncology Live Urologists in Cancer Care®October 2014
Volume 3
Issue 5

Despite the promise associated with biomarker-based tools as a means of helping to guide cancer diagnosis and treatment, there is a potential stumbling block: insurance reimbursement.

Dane Dickson, MD

Despite the promise associated with biomarker-based tools as a means of helping to guide cancer diagnosis and treatment, there is a potential stumbling block: insurance reimbursement.

The widespread uptake of prognostic and predictive tools is likely only if physicians can be certain they will get reimbursed for the tests through public or private health insurance.

As a result, for companies developing biomarker-based tests, securing coverage by Medicare, Medicaid, and/or private insurers is an enormously important goal. For many, it is the final, make-or-break hurdle before their tests can enter the marketplace, since most such tools do not need approval from the FDA.

To earn coverage, developers need these tools to meet the clinical utility/impact expectations of the payer community, often called medical necessity. One Medicare contractor has worked to develop and communicate these expectations/standards for assessing the medical necessity of biomarker-based tests. The Molecular Diagnostic Services Program (MolDX) is run by Palmetto GBA, a subsidiary of Blue Cross Blue Shield of South Carolina. Palmetto GBA worked with the Centers for Medicare & Medicaid Services (CMS) to establish a comprehensive program to address the growing number of tests and their technological complexity. As part of its Medicare Administrative Contract, MolDX has developed a program for the registration and medical-necessity review of molecular/genetics-based tests that are used in the diagnosis and treatment of patients with cancer and other conditions. The program addresses the primary question: Should the test be covered by Medicare as reasonable and necessary?

Medicare decision makers in other parts of the United States tend to adhere to the program’s decisions for the sake of consistency—as do many private insurers.

To learn more about how MolDX is set up and how it makes decisions about which tests should be covered, Urologists in Cancer Care sat down with a leader of the program, Director of Clinical Science Dane J. Dickson, MD. An oncologist who is former medical director of the Teton Cancer Institute in southeast Idaho, Dickson joined MolDX in 2013 after working for the program for several years as a subject-matter expert evaluating the value of molecular tests. As one of the employees at the small but powerful program, Dickson is responsible for compiling a final scientific overview to decisions from a panel of subject-matter experts on the worthiness of molecular tests for Medicare coverage.

UCC: How was MolDX created, and how did its decisions about coverage for molecular tests become benchmarks for health insurers around the country?

Dickson: MolDX grew out of the work of Palmetto GBA, a subsidiary of Blue Cross Blue Shield of South Carolina. Palmetto is an AB Medicare Administrative Contractor (MAC), meaning it is contracted to administer Part A and Part B Medicare claims in specific US regions. A Palmetto employee and board-certified pathologist, Elaine Jeter, MD—medical director of MolDX—saw a need to help define what Medicare was paying for in molecular testing. CMS agreed there was a unique challenge to addressing these types of tests, and gave MolDX direction to develop the program as part of its AB MAC scope of work.

Because MolDX was being run by Palmetto, the program started within the company’s Jurisdiction 1 AB MAC region— California, Nevada, Hawaii, and the Pacific Territories. Although Noridian Administrative Services took over this jurisdiction 1 year ago, the MolDX program continues to be supported in this jurisdiction and has been added to Palmetto GBA’s Jurisdiction 11 contract (South Carolina, North Carolina, Virginia, and West Virginia).

Other MACs have the ability to adopt our policies, and over time, there has been a specific focus on consistency among the contractors and CMS; it doesn’t make sense to have something covered in one region and not another.

That thought process was cemented specifically for molecular testing in July of this year, when the Protecting Access to Medicare Act1 was passed. In that legislation, Congress instructed the US Department of Health and Human Services to designate between one and four MACS to develop a national coverage policy for molecular tests. Right now, through its MolDX program, Palmetto GBA is the only MAC that has been working on this set of lab services.

Furthermore, other decision-makers look to the MolDX program for information because the program is quite unique in its expertise. There are very few individuals working for payers who have been trained in molecular medicine or have a lot of experience reviewing clinical trials, and our team has that expertise. For instance, as far as I’m aware, I’m the only oncologist working with a MAC in the United States.

Is there a chance, then, that the federal government will officially select MolDX as the sole program charged with determining whether biomarker-based tests will be covered by Medicare?

That will be up to CMS to decide, and we can’t speculate. We feel that what we have developed is the model for what was in the legislation, but ultimately that law has to be put into regulation, and we will work with CMS on whatever the next steps are.

One thing CMS has done is to gather the MAC medical directors regularly a few times a year to talk about LCDs [local coverage determinations] they are working on, discuss the rationales for decisions, and find unity. So there’s already a push for unity, but there’s nothing specifically binding on any MAC to adopt another MAC’s LCD right now.

When MolDX is asked by a company or a lab to consider a test for Medicare coverage, what process unfolds?

Everything we do in the MolDX program is under the direction of CMS. Several years ago, the Centers for Disease Control and Prevention published a process known as ACCE for evaluating genetic tests. The process calls for the consideration of Analytic Validity, Clinical Validity, Clinical Utility, and Ethical, Legal and Social Implications (ACCE)—including cost—when evaluating a molecular test. CMS has asked that anything covered be reasonable and necessary and adhere to this ACCE criteria.

By far and away, we focus on the first three tenets of the ACCE. We don’t spend a lot of time talking about the economics. We don’t want to say something should not be covered because of cost alone. Instead, our main goal is to look for data that can show how the test, applied to a specific group of individuals at a specific time in their treatment, tells the physician exactly what he or she needs to do, based on published data determining what the expected outcome will be.

When a lab makes an evaluation request, it first applies for a unique identifier, then submits a dossier of clinical trials and other documents in support of the test for consideration. The dossier first goes to the MolDX Executive Committee, which does a high-level review. Then, a review package of the science articles and references, redacted of pricing and other company-designated confidential information, is sent to subject-matter experts (clinicians and academics familiar with the clinical space the test addresses), who do a specialized review to determine whether the science supports that the test is ready for widespread use in the clinical setting, and why or why not. They review all the clinical trials and data that have been presented and determine if the test’s use is supported. Their determinations come back to the Executive Committee, which makes a final decision based on Medicare requirements for what meets reasonable and necessary criteria (medical necessity).

Based on all their recommendations as well our own review, we make one of the following decisions: the test will not be covered; the test will be covered, but with limitations (ie, only when used within a certain population of patients); or the test will be covered fully in any appropriate clinical setting.

One thing Medicare cannot pay for is a screening test or a purely prognostic test. Screening in an asymptomatic person is not a Medicare-covered benefit unless it is provided for in regulation. The Medicare regulations specify that a service or treatment (ie, diagnostics) should result in a change in physician behavior and improved outcomes. In the case of diagnostics, the test should provide specific information upon which a clinical decision can be based in order to improve the beneficiary treatment/outcome.

Medicare can’t cover something that is confirmatory. If a patient already has a diagnosis of prostate cancer, and the test further confirms that original diagnosis and doesn’t lead to a change in treatment, then it’s just confirmatory and non-covered.

If MolDX decides not to recommend a test for Medicare coverage, does that affect the test’s marketability?

Tests that get rejected by MolDX may still be covered by private insurance. The developers of these biomarker-based tools may continue forward with the caveat that Medicare patients must pay out of pocket when doctors order their tests. So if MolDX doesn’t recommend Medicare coverage for a test, it doesn’t mean the company developing it will dissolve. It is a big hurdle for them, since Medicare is a major payment source, encompassing half the healthcare dollars spent in the United States. Still, there is also a large non-Medicare population for which these tests may be developed, as well.

It’s true, though, that a lot of private insurers may use MolDX decisions in determining whether to cover a test, so if Medicare isn’t covering it, they might not, either.

To date, as a partnership with the labs, we have not published many of our negative reviews. We give them the opportunity to withdraw their dossier before we decide and publish a non-coverage policy, recognizing that publishing the decision could impact their ability to continue their research and maintain investing dollars. If their test is not there yet, they can re-present to us once they have additional science to support the test, without any published decisions. A claim for any test is subject to individual determination by Medicare until a full review is completed and published.

Is there any opportunity for public comment in the MolDX evaluation process?

Public comment comes in if and when we publish an LCD. The LCD process includes a public notice and comment period. During the review there is often discussion with the submitting labs (and their experts) as we evaluate their dossier and all supporting information. Many also include anecdotal evidence in their submissions, but the decisions are based on the hard clinical science, as anecdotal comments have never had a great deal of sway in the medical community or our review, because so many other variables come into play.

We are in the process of building a larger molecular advisory committee, a group of independent physicians who will give us additional insight on things that should be covered, even when there may not be robust clinical information as of yet. Several major academic centers will provide us with individuals to help us determine what should be covered and what is coming up in the area. If we are reviewing an early test in GU with promise but immature data, and if the advisory group says they think it will have benefit given a specific unmet need, we will give consideration to providing limited coverage linked to the lab’s ability to conduct further data collection, because this field is a rapidly moving target, and we have to be reasonably flexible to not miss very promising early testing.

How can doctors interested in using a particular test find out if it is covered by health insurers?

Everything we cover will appear in an LCD/article on our website—www/ There are a lot of things coming down the pike that we’re reviewing—particularly in the prostate space—for which decisions are still pending.

The best place to go for coverage information is to the company that developed the test.

What else should community urologists know about navigating the growing field of biomarker-based tools?

One, labs that come into their offices with tests are not under the same regulations or restrictions that pharmaceutical companies are when it comes to sharing information. So whereas a drug representative has clear guidelines about what he can share based on FDA approval, a lab does not. A lab may say a test is valuable without necessarily having what we consider clinical utility data.

Two, the area of molecular or personalized medicine is exploding rapidly. The testing and tools have become readily available so that we’ll see hundreds of new ones come out in the next few years. We’ll have to be careful to have a rational approach to the introduction of this testing; otherwise, we could get testing that costs patients and the healthcare system money but doesn’t provide any substantial benefit—or even could be harmful.

This harm could come because the test could convince a doctor to prematurely stop following the patient due to the fact that the test may say the patient has a lower risk of developing metastatic cancer. The physician may stop following closely, and that patient could end up dying of metastatic disease that, if found early, could have been cured. And that’s the caution: We must make sure we’re not abandoning standard of care without knowing we can by way of excellent science.


  1. Text of the Protecting Access to Medicare Act of 2014. website. Accessed September 11, 2014.

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