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Genetic tests, a financial gamble?

A genetic marker helps doctors know which medication will help patients after a heart attack. (Kim Hairston, Baltimore Sun video)

This past winter my wife I were shocked to learn that our first trimester screening results indicated that we had a high-risk pregnancy. To investigate the possibility of a chromosomal abnormality, we were referred to a genetic counselor and learned about a relatively new genetic screening test that could help us figure out what was going on.

We were warned that while most insurers would cover this expensive test, there was no guarantee, and we would not know until the insurance company was billed. Furthermore, we were advised to negotiate with the testing lab if it was not covered. I was perplexed and wondered: How would I negotiate a lab test? On top of the stress and anxiety about what was going on with our baby, we were essentially told to take a financial gamble.

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Evan and Michelle Tunis of Coral Springs were tested a year ago by JScreen. The samples found Michelle, 30, was a carrier of Maple Syrup Urine Disease. But Evan, 34, was not.

Fortunately, the testing came back negative, but the bill came back positive to the tune of $1,000. Insurance would eventually cover this, but I learned there was actually no single price for this test. In fact, many genetic testing companies charge one price for insurers, one price to individuals, and others even have a negotiated rate much cheaper than that. In fact, some of these tests are so expensive, some companies offer prices based on financial need, as if one were applying for college loans!

In conversations with genetic counselors and physicians I found widespread frustration with the billing process, which often requires special authorizations or letters for each patient provided to the insurance companies or testing lab. These special authorizations are not guaranteed, and even the same letter can be approved or rejected if it ends up in the hands of a different reviewer. This administrative burden strains medical providers, adds costs by requiring more personnel, and reduces the time providers can spend on patient care.

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Additionally, patients have few resources to help them choose between labs that offer similar test products. Clinicians may even steer medical choices toward cost and cooperativeness on the part of the testing company, and not necessarily toward the best medical choice. This lack of transparency is both a medical and consumer issue that will affect millions of Americans as the use of genetic testing becomes more widely used.

Genetic testing. (Chicago Tribune)

While the fight for clear and fair pricing is an issue in the entire health care system, genetic testing has an additional set of challenges. The Food and Drug Administration is beginning to regulate genetic testing under medical device statutes, and the Centers for Medicare and Medicaid Services (CMS) regulate labs through Clinical Laboratory Improvement Amendments; however there is currently no straightforward mechanism to ensure price transparency and information about each test. The Federal Trade Commission aims to prevent fraud and unfair business practices but is ill-equipped to evaluate the medical capabilities of each test. The growth of new testing companies and technologies makes it nearly impossible to mandate that insurance companies cover specific tests, at either the state or federal level.

To defend their wide range of seemingly arbitrary prices, some companies argue that they take lower payments to build market share and can use new patient data to further improve their products. They oppose regulations that could impede product development, and insurance companies are resistant to pay for tests that do not have a direct effect on a patient's care. However, these motivations cannot justify the extreme price inequity in costs or coverage, especially when they can disproportionately hurt the poor or uninsured. There are some simple policy solutions that could improve this situation for consumers.

Ashley Allenby is a full-time licensed genetic counselor in the CI-Oncology department of Anne Arundel Medical Center.  She provides genetic counseling for women and men with a high breast cancer risk based on the results of DNA testing. Testing is advised based on several factors, including personal or family history indicating a hereditary condition, breast cancer diagnoses at age 50 or younger in multiple generations of the same family line, ovarian cancer at any age, or Ashkenazi Jewish ancestry.

At a minimum, testing companies should provide a type of "Monroney sticker," like those seen on new cars, that lists the suggested or maximum price of the test and describes its quality in terms that are understandable to everyone, not only clinicians. Many testing products provide identical clinical information, so how can patients choose if their insurance covers multiple labs?

CMS has attempted to make sense of pricing through the Protecting Access to Medicare Act, which allows it to set reimbursements based on median rates. In so doing, CMS can help fill in the gaps of pricing information, so that if patients need to negotiate, they have some sense of what the going market rate is for their test. The recognition of genetic tests by CMS as valid clinical tools will also continue to promote their uptake by insurance companies, so it's a win-win. We should support CMS with increased funding, as well as the FDA, which can improve patient education through testing label regulations.

Genetic testing is a developing field whose value is still being determined. It's pricing, at least, should be clear.

Tom Jaworek (thomas.jaworek@umaryland.edu) is a graduate student in th program epidemiology and human genetics at the University of Maryland, Baltimore.

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