By JULIE EGGINGTON, EKATERINA CLEARY & LEEZA OSIPENKO
When CMS issued its Request for Info 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 trade will reply. And when it does, its arguments will sound polished, acquainted, and deeply reassuring. They may also 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 restricted to some unhealthy actors
Count on labs to argue that fraud, waste, and abuse is uncommon, remoted, and already addressed by enforcement actions. The narrative will characteristic a handful of egregious instances, introduced as outliers in an in any other case reliable ecosystem.
However the issue isn’t a number of rotten apples. It’s the orchard’s design.
Take “code stacking” for instance, wherein laboratories invoice a number of particular person genetic check codes relatively than a single panel code, typically inflating reimbursement. In a single 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 instances, and Division of Justice settlements level to patterns, not anomalies: high-volume genetic panels ordered with little scientific justification, molecular pathology exams billed below seize bag and overly permissive billing codes, and aggressive advertising and marketing and affected person harvesting practices concentrating on susceptible populations.
A key driver is opacity. Many laboratory-developed exams (LDTs) are marketed below related or similar names regardless of significant variations in design, accuracy, and meant use. To a clinician or payer, they seem interchangeable. In actuality, they aren’t.
This naming ambiguity permits lower-quality exams to experience the coattails of better-validated ones, whereas nonetheless commanding reimbursement. Fraud, on this context, isn’t at all times a dramatic act. It’s typically embedded in routine billing.
Declare 2: Precision drugs superior by genetics is price the fee attributable to improved affected person outcomes
The second argument will enchantment to aspiration. Labs will emphasize that genetic testing is the spine of precision drugs and due to this fact a worthwhile funding for CMS, regardless of the ballooning prices.
Laboratory lobbyists and trade teams will use the ‘age of precision drugs’ 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 fact right here to the worth of genetic exams. Chosen genetic exams have demonstrated clear scientific utility, enhancing analysis, or guiding therapy 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 completely absent. Medical utility, within the uncommon situations the place customers or a check developer has demonstrated it, is usually prolonged as a halo over different exams from totally different labs providing equally marketed exams. Whereas the me-too unproven exams share practical branding and billing codes with the confirmed check, they typically differ in methodology or efficiency in nontransparent methods. Briefly, attributable to inherent variations in methodologies, the me-too exams might not enhance affected person outcomes on the similar effectiveness because the confirmed check, and maybe by no means.
This isn’t precision drugs. It’s approximation at scale.
For policymakers, the excellence issues. With out proof {that a} check informs scientific choices in a means 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 show it for every distinct check, 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, count on labs to concern 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 essential assumption that has not been established, particularly that the present quantity and acceleration of precision drugs associated laboratory testing is delivering life-saving profit at scale.
In lots of instances, that proof doesn’t exist, or exists on the contrary.
Innovation in healthcare isn’t outlined by the variety of exams medical doctors 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 leads to the dilution of the true worth of genetic testing. Even when, for instance, a most cancers genetic testing laboratory has a check with confirmed scientific utility for sufferers with sure cancers, testing sufferers with out the related cancers would dilute its measurable scientific utility. And because of the existence of false positives in diagnostics, testing sufferers recruited inappropriately might in the end hurt extra sufferers than the check helps.
Moreover, the absence of billing requirements can distort innovation. When reimbursement is on the market with out strong proof necessities, the market rewards proliferation over validation. With out oversight, high-quality exams should compete with lower-cost, lower-evidence alternate options which are 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 drugs 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 unhealthy 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 ought to be tied to demonstrated scientific utility on the check degree, not inferred from category-level proof.
The CRUSH RFI presents a chance to reset expectations. The laboratory trade will make its case. CMS ought to be able to look previous the acquainted narratives and ask a less complicated query: not whether or not a check might advance drugs, 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 energy of scientific proof supporting breakthrough medical units and diagnostics, funded by Arnold Ventures.
