This article was updated with new information on March 5, 2023.

As labs throughout the country continue to explore new revenue streams in the face of seemingly endless annual cuts from CMS and commercial payers, many are adding genetic testing and molecular diagnostics to their test menus.

However, due to a patchwork of regional policies and payer guidelines, billing for and receiving reimbursement for these services can oftentimes be far from straightforward, according to Ann Lambrix, Vice President of RCM Solutions for Lighthouse Lab Services.

“What we aim to prevent is investing a lot of time, energy, and resources developing your testing platforms and then finding out that certain payers won’t reimburse you,” Lambrix says. “It’s extremely important to do your research upfront and make sure you intimately understand the landscape and insurance plans you’ll be dealing with.”

With that in mind, here are three things to be aware of when billing for genetic and molecular testing:

Know your payer mix

Before you start rolling out genetic and molecular testing services and billing them to insurance, understand the patient population and providers you’ll be marketing to. Will it primarily be presented in a family practice setting, for example? Keep in mind that because there are typically very few national policies governing reimbursement for genetic testing, rules and guidelines for which payers will reimburse for these services, and under what circumstances, are crucial items to be aware of.

First, examine whether you’re participating with the plans that represent the patient population you’ll be marketing these services to. If you’re in network, what’s the contracted rate for the test you’ll be billing? If you’re not contracted with a particular payer, what is their policy for reimbursing genetic testing for out-of-network providers?

Next, you should research whether these plans require prior authorization for these services, or if they utilize a Laboratory Benefit Management program, such as AIM or EviCore. Such programs manage testing and reimbursement policy for commercial payers, adding another layer of rules to be familiar with before you start billing.

Understand policy and coverage limitations.

While the availability of these types of tests is great from a clinical standpoint, it’s important to understand the various coverage rules governing reimbursement for various payers.

For Medicare, you will see National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs) that will outline specific policies for the type of testing you’re performing. These will explain or provide guidance on the reimbursement structure for these codes. The total number of NCDs is very limited, while LCDs are more prominent and are based on geographic location.

You should check to ensure you fall within medical necessity determinations for both policies before billing a specific code. Some factors that could impact medical necessity/reimbursement include appropriate diagnosis codes, age limitations, familial or personal history, and more.

Several MACs also participate in the MolDX program to oversee molecular and genetic spending. Labs billing in a MolDX jurisdiction will have to register their tests in advance to receive special z-identifiers that must accompany appropriate CPT and diagnosis codes when seeking reimbursement.

Finally, keep in mind that commercial payer and Medicaid guidelines will often vary based on product line (for example, state or HMO plan), so it’s important to understand the specific rules and prior authorization programs for each product you bill.

Evaluate coding and reporting capabilities.

When performing an initial coding evaluation for new clients, Vachette will review the genes within a panel to determine the appropriate codes that need to be assigned. Keep in mind there are Tier 1 and Tier 2 codes, with Tier 1 describing a specific gene within the panel your lab is performing.

Proper ICD-10 coding is also going to greatly ease the reimbursement process. When a claim is submitted, make sure you understand what documentation is required and that it supports the panel being performed.

Finally, be sure to evaluate your reporting capabilities for the ability to accounts receivable, collection percentage, and especially denial trends. Understanding why you’re receiving denials can allow you to appropriately appeal for payment and correct claims in the future for a smoother reimbursement process.

We’re often called to do a back-end audit when clients are billing genetic testing but not receiving payment, and we typically inform them it’s because they haven’t done their due diligence and performed these initial steps! If you’re unsure of where to begin, feel free to contact us for a free consultation.

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