By JULIE EGGINGTON, EKATERINA CLEARY & LEEZA OSIPENKO
When CMS issued its Request for Data below the Complete Rules to Uncover Suspicious Healthcare (CRUSH) initiative in February, it zeroed in on a long-festering drawback: fraud, waste, and abuse in laboratory testing, particularly in genetic and molecular diagnostics.
The laboratory business will reply. And when it does, its arguments will sound polished, acquainted, and deeply reassuring. They will even be both disingenuous or unproven.
If policymakers need this effort to succeed, they need to be ready to deal with three claims which have lengthy shielded problematic practices from significant oversight.
Declare 1: Fraud, waste and abuse is proscribed to a couple dangerous actors
Count on labs to argue that fraud, waste, and abuse is uncommon, remoted, and already addressed by way of enforcement actions. The narrative will function a handful of egregious circumstances, offered as outliers in an in any other case reliable ecosystem.
However the issue is just not a couple of rotten apples. It’s the orchard’s design.
Take “code stacking” for instance, wherein laboratories invoice a number of particular person genetic take a look at codes fairly than a single panel code, typically inflating reimbursement. In one evaluation, laboratories used between 1 and 12 billing codes for hereditary most cancers panels with the identical indications for testing, with estimated common fees starting from $679 to $8,589 for ostensibly comparable exams. The repetition of those behaviors throughout firms suggests systemic incentives, not remoted misconduct.
Ample Medicare billing knowledge, whistleblower circumstances, and Division of Justice settlements level to patterns, not anomalies: high-volume genetic panels ordered with little medical justification, molecular pathology exams billed below seize bag and overly permissive billing codes, and aggressive advertising and marketing and affected person harvesting practices focusing on weak populations.
A key driver is opacity. Many laboratory-developed exams (LDTs) are marketed below comparable or equivalent names regardless of significant variations in design, accuracy, and meant use. To a clinician or payer, they seem interchangeable. In actuality, they don’t seem to be.
This naming ambiguity permits lower-quality exams to trip the coattails of better-validated ones, whereas nonetheless commanding reimbursement. Fraud, on this context, is just not at all times a dramatic act. It’s typically embedded in routine billing.
Declare 2: Precision medication superior by genetics is value the price as a consequence of improved affected person outcomes
The second argument will attraction to aspiration. Labs will emphasize that genetic testing is the spine of precision medication and due to this fact a worthwhile funding for CMS, regardless of the ballooning prices.
Laboratory lobbyists and business teams will use the ‘age of precision medication’ argument to justify the truth that genetic testing is now costing Medicare nearly as a lot as all different outpatient laboratory testing mixed. In the latest evaluation from 2024 Medicare knowledge, genetic exams accounted for 43% ($3.6 billion) of complete Medicare outpatient laboratory spending, regardless of representing solely 5% of all Medicare outpatient laboratory exams carried out.
There may be some reality right here to the worth of genetic exams. Chosen genetic exams have demonstrated clear medical utility, enhancing prognosis, or guiding remedy that has resulted within the extension of life.
However the leap from “some” exams resulting in improved affected person outcomes to “most” exams resulting in improved affected person outcomes is the place the argument breaks down.
The proof base for a lot of marketed genetic and molecular exams stays skinny, heterogeneous, or fully absent. Scientific utility, within the uncommon cases the place customers or a take a look at developer has demonstrated it, is commonly prolonged as a halo over different exams from completely different labs providing equally marketed exams. Whereas the me-too unproven exams share purposeful branding and billing codes with the confirmed take a look at, they typically differ in methodology or efficiency in nontransparent methods. Briefly, as a consequence of inherent variations in methodologies, the me-too exams might not enhance affected person outcomes on the identical effectiveness because the confirmed take a look at, and maybe in no way.
This isn’t precision medication. It’s approximation at scale.
For policymakers, the excellence issues. With out proof {that a} take a look at informs medical choices in a manner that improves well being, its worth to Medicare and Medicaid stays unproven.
If labs want to declare that their exams save or enhance lives, they have to display it for every distinct take a look at, whether or not it’s market chief exams or the me-too exams.
Declare 3: Oversight on labs slows innovation on the expense of lives saved
Lastly, anticipate labs to subject a warning: stricter oversight of labs’ affected person recruitment and billing practices will sluggish innovation, delay entry to cutting-edge diagnostics, and in the end hurt sufferers.
This argument rests on a crucial assumption that has not been established, specifically that the present quantity and acceleration of precision medication associated laboratory testing is delivering life-saving profit at scale.
In lots of circumstances, that proof doesn’t exist, or exists on the contrary.
Innovation in healthcare is just not outlined by the variety of exams docs order for sufferers, or the growing complexity and expense of molecular pathology testing, however by their impression on affected person outcomes. Requiring that the proper sufferers obtain the proper exams (which have confirmed utility), on the proper time, doesn’t inherently suppress innovation; it helps distinguish between significant advances and the noise
Effectively documented efforts by some genetics labs to recruit as many sufferers as potential ends in the dilution of the true worth of genetic testing. Even when, for instance, a most cancers genetic testing laboratory has a take a look at with confirmed medical utility for sufferers with sure cancers, testing sufferers with out the related cancers would dilute its measurable medical utility. And as a result of existence of false positives in diagnostics, testing sufferers recruited inappropriately might in the end hurt extra sufferers than the take a look at helps.
Moreover, the absence of billing requirements can distort innovation. When reimbursement is offered with out sturdy proof necessities, the market rewards proliferation over validation. With out oversight, high-quality exams should compete with lower-cost, lower-evidence alternate options which can be marketed as equal or higher than the confirmed exams.
Stricter oversight of laboratories affected person recruitment and requests for reimbursement would offer CMS alternative to make sure that the objectives of precision medication are achieved. It might not halt innovation. It might redirect it towards demonstrable worth.
A path ahead
If CMS desires to scale back fraud, waste, and abuse in laboratory testing, it ought to focus much less on chasing particular person dangerous actors – which is proving to be an infinite sport of whack-a-mole – and extra on correcting structural weaknesses.
That begins with transparency. Exams that differ in design or efficiency mustn’t share indistinguishable names in billing methods. Clear differentiation would make it tougher for lower-quality exams to masquerade as established ones.
It additionally requires proof self-discipline. Protection and reimbursement must be tied to demonstrated medical utility on the take a look at stage, not inferred from category-level proof.
The CRUSH RFI presents a chance to reset expectations. The laboratory business will make its case. CMS must be able to look previous the acquainted narratives and ask an easier query: not whether or not a take a look at might advance medication, however whether or not it does.
Julie Eggington is CEO of the Heart for Genomic Interpretation and founding father of Grandview Consulting. Ekaterina Cleary is a Knowledge Scientist and Leeza Osipenko is CEO at Consilium Scientific, the place she leads the event of This submit is a part of their work at Evimeter, a quantitative framework for evaluating the power of medical proof supporting breakthrough medical units and diagnostics, funded by Arnold Ventures.
