The Rise of Genomics Presents Challenges For Managed Care

For years researchers have been touting the potential benefits of genomic medicine, and while many of these ideas initially were used primarily in the research setting, they are now making their way into clinical practice. This expansion of utilization into practical medicine has presented managed care professionals with new challenges regarding reimbursement and coverage decisions.

“Genomic testing is rapidly expanding, especially in certain specialty areas,” said Bill Kerr, MD, chief executive officer of Avalon Healthcare Solutions.

Over the last decade, the number of personalized medicines on the market has grown significantly. According to a recent report from the Personalized Medicine Coalition, the number of personalized medicines has increased from 5 drugs in 2008 to 132 drugs in 2016.

In addition, research from the Tufts Center for the Study of Drug Development found that 42% of all drugs in the development pipeline include biomarkers as part of their design.

The prevalence of genetic testing in clinical practice, depends, in part, on the type of testing that is being done. For instance, John Deeken, MD, an oncologist and senior vice president at the Inova Translational Medicine Institute, said certain genetic tests that are used to detect cancer risk, such as the screening test to detect the BRCA1 or BRCA2 gene variations in women, are now frequently being used in practice.

“That’s pretty mainstream and hopefully it’s so well accepted that it’s pretty prevalent I’d say across US medical care,” he said.

Dr Deeken said pharmacogenomic tests, or genetic tests that are used to predict which medications and doses will be best tolerated in patients based on their genetic makeup, are also being used in clinical settings; however, not on such a widespread scale. 

“While the evidence is high and the FDA guidance is strong, I would say the adoption has been slow since the FDA first recommended that in the 2000s for a variety of reasons, physician education and insurance reimbursement are probably the main two,” Dr Deeken said.

Finally, although costs have dropped dramatically in recent years for whole genome sequencing, this more robust form of genetic screening is still mostly being used in academic or research centers.

“Some centers around the country are doing it, including ours, but that’s sort of the cutting edge and ones that are, are not being done with insurance reimbursement typically,” Dr Deeken said.

The prevalence of genomic testing also depends on the specialty area. It is most commonly being used in oncology, rare diseases, and pharmacogenomics, according to Daryl Pritchard, PhD, vice president of science policy for the Personalized Medicine Coalition.

Dr Kerr said today the largest volume of genetic requests involve family cancer syndromes related to BRCA1, BRCA2 or the Lynch syndrome genes (MLH1, MSH2, MSH6, and PMS2)
and is followed by gene panels used in cancer treatment. 

“Nonetheless, genetic testing continues to be in the minority of total lab testing, based on volume or even cost,” he said.

Weighing the Costs of Genomics

The cost of these type of tests, according to Dr Deeken, can range from less than $100 for an individual gene up to $1000 for whole genome sequencing. This $1000 figure is the cost for the test itself and does not include the cost for interpretation of the results.

“The chemistries and the machines have gotten so good that the cost curve has gone down dramatically and continues to go down, so therefore within a few years it will be as expensive to do a whole genome as it is to do some of the other standard lab tests that we do on people,” he said. 

As the costs for genetic tests goes down, the potential genomic testing could have on managed care continues to rise. Dr Pritchard said personalized medicine can help the industry move past trial and error medicine to find more targeted approaches based on the specific genetic makeup of a patient.

“You’ll see a managed care decision about what is the most effective thing and you’ll get that to the patient right away and you’ll see these improvements not only in their clinical outcomes but also in the economic impact of care because you’ll avoid further complications,” he said.

For instance, a recent study in the Journal of the American College of Cardiology, led by Robert S Epstein, MD, that examined the role pharmacogenomic testing could play in the management and dosing of warfarin associated with hospitalizations for bleeding or thromboembolism found that when the pharmacogenomic test was used it reduced hospitalization rates for heart patients by about 30%.

Barriers to Genomics Adoption

However, despite the potential of genomic testing, experts said barriers still exist before more widespread clinical adoption can be achieved.

One of the most significant challenges is reimbursement and insurance coverage. Dr Pritchard said the default answer for many payers asked to cover these types of tests is no, unless there is proof or a significant amount of evidence to prove a genetic test will improve outcomes.

“The coverage issue really sets up this conundrum in science,” he said. “In order to develop the evidence necessary to show the value of the diagnostic tests, you need to have access, patients need to be getting it, but without coverage patients don’t get it, they don’t have access, so you can’t develop that evidence.” 

Dr Deeken said he believes the biggest impediment to the whole field is that many people are left paying for these tests on their own or their health systems are picking up the costs of these tests.

“We’ve spent a lot of time over the last year in discussion with individual payers,” he said.

Dr Kerr explained that the challenges for payers center around three main issues: is the test covered by the benefits they are administering, is it appropriate for a member’s specific clinical situation, and how can the test be billed or reimbursed. 

To address these challenges, payers are adopting various approaches including seeking help to develop coverage policies, requiring counseling in advance, performing prior authorization, and conducting a clinical review or a retrospective audit once a claim in submitted. 

“All payers with whom we meet are struggling with the area of genetic testing,” Dr Kerr said.

Aside from reimbursement, there is also a significant educational component that is necessary for further adoption in clinical settings.

Dr Deeken said that because the field has emerged within the last 15 years, many physicians were not taught about genomic testing in medical school. That, combined with the busy schedule of a typical physician, has led to a lack of knowledge about these testing tools and what to do with the results. 

For example, a study published in Personalized Medicine in Oncology, led by Amy M Miller, PhD, reported that only four out of 10 consumers were aware of personalized medicine and just 11% reported that their doctor had discussed these ideas with them.

Expanding the Understanding of Genomic Data

Dr Pritchard explained that there is a real disparity between academic health centers and community hospital systems. While academic health centers are often more plugged into the latest medical research, community health systems can be left behind.

“Community hospital doctors really need a whole personalized medicine education,” he said. “There’s a need for greater programs, greater online materials, there’s a need for cultural change, for buy-in, so that doctors are interested in that information.” 

The industry is also still working to develop IT structures that can support the use of genomic data. 

“A lot of personalized medicine is associated with massive amounts of data,” Dr Pritchard said. “We can handle the amount of data but then how to effectively manage it, that’s a work in progress.” 

One of the challenges, according to Dr Pritchard, is getting the discrete data into an electronic health record that delivers an alert when it is appropriate without triggering alert fatigue for physicians. 

Regardless of the obstacles that remain, experts agreed that genomic testing is here to stay, and will substantially alter the landscape of medical diagnostics and treatment. 

“This is where science is leading medicine, so now it’s just the growing pains of trying to incorporate this, but the improvements, innovation, and care that are going to bring down costs and are going to improve health are going to go
through personalized medicine,” Dr Pritchard concluded. “I think it’s inevitable that it will be adopted.”