Genetic testing provides deep insights into a person’s health by analyzing their DNA. This technology informs diagnosis, guides treatment decisions, and assesses disease risk. For Medicare beneficiaries, determining coverage for these advanced tests is complex. Medicare coverage is highly situational and depends on strict criteria that must be met before payment is approved. This article clarifies the rules governing when Medicare pays for genetic tests and the associated financial responsibilities.
The Requirement of Medical Necessity
The fundamental rule governing Medicare coverage for genetic testing is that it must be “medically necessary.” This means the test must be required for the diagnosis or treatment of a specific medical condition, not for general screening or curiosity. Medicare covers testing when the results will directly impact the patient’s current treatment plan or lead to a specific diagnosis.
Medicare uses two primary mechanisms for coverage determination: National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs). An NCD is a nationwide policy issued by the Centers for Medicare & Medicaid Services (CMS) specifying whether Medicare will pay for a service across the entire country. For example, an NCD details coverage for next-generation sequencing (NGS) tests for patients with advanced cancer.
For tests without an NCD, coverage is determined by LCDs, which are policies set by Medicare Administrative Contractors (MACs). MACs are private companies that process claims in a specific geographic region, meaning coverage can vary by state or territory. The ordering physician must submit documentation to establish medical necessity according to the relevant NCD or LCD.
LCDs often provide specific criteria, such as requiring a known gene-drug interaction where the test results would directly impact condition management. Furthermore, germline testing, which looks at inherited DNA, is often limited to a single test per lifetime for the same genetic content. This layered system of national and local policies dictates when a test shifts from being an informative tool to a covered diagnostic service.
Genetic Testing Covered Under Medicare Part B
Most covered diagnostic genetic testing falls under Medicare Part B, which covers outpatient medical services and laboratory tests. When medical necessity criteria are met, specific types of genetic analysis are routinely covered. This includes testing for inherited cancer risk, such as BRCA1 and BRCA2 mutations, for individuals with a personal or strong family history of certain cancers.
Another area of coverage is pharmacogenomic testing, or PGx testing, which analyzes how a patient’s genes affect their response to certain medications. PGx testing is covered when used to guide treatment for specific conditions. Examples include determining the correct dosage for anticoagulants like warfarin, or targeting drug therapy for cancer or cardiovascular disease, helping doctors select effective drugs and avoid adverse reactions.
Next-generation sequencing (NGS), which analyzes multiple genes simultaneously, is covered for patients with advanced, recurrent, refractory, or metastatic cancer. This comprehensive testing pinpoints the precise genetic mutations responsible for the disease, directly informing the use of targeted therapies. Medicare generally does not cover genetic testing performed purely for preventative screening without symptoms, ancestry determination, or research purposes.
Navigating Costs and Coverage Denials
Even when a genetic test is covered by Medicare Part B, beneficiaries are responsible for a portion of the cost. After the annual Part B deductible is met, the beneficiary owes 20% of the Medicare-approved amount for the laboratory service. Since the cost of genetic tests can vary widely, this 20% coinsurance can result in a significant out-of-pocket expense.
Beneficiaries with supplemental coverage, such as a Medigap plan or a Medicare Advantage (Part C) plan, may have these out-of-pocket costs reduced or eliminated. Before the test is performed, the provider or laboratory may present the patient with an Advance Beneficiary Notice of Noncoverage (ABN). Signing an ABN means the beneficiary acknowledges that Medicare may not cover the test and agrees to pay the full cost if the claim is denied.
If a claim for genetic testing is denied, the beneficiary has the right to appeal the coverage decision. It is recommended that patients discuss the potential for an ABN and confirm coverage with their ordering physician and the testing laboratory before proceeding. Understanding the coverage criteria and financial implications upfront is the best way to avoid unexpected medical bills.