What Insurance Plans Need to Know About Biomarker Legislation

In health care, technology always outstrips the legislation meant to regulate it. The latest proof of this can be found in the biomarker bills being considered and passed in statehouses nationwide.

The motivation behind this legislation is commendable, but they have broad and unforeseen implications for health insurers. Plans must understand what these bills require and how they affect their operations.

What's in the Biomarker Bills?

Fourteen states have passed biomarker bills; others will likely follow this year. The laws are not identical but do share common elements. Typically, they apply to post-diagnosis coverage and mandate that insurers cover biomarker testing when the test provides clinical utility to the patient as demonstrated by medical and scientific evidence, including, but not limited to, FDA approval, CMS coverage determinations, and nationally recognized clinical practice guidelines.

What's missing from the bills are clear definitions of key terms, like "biomarker testing" and "nationally recognized clinical practice guidelines," which leaves coverage requirements up for interpretation by the different parties involved. The bills also typically allow prior authorization requirements, often with a decision deadline, and stipulate a convenient appeals process for when coverage is denied.

Biomarker Bills: Pros and Cons

Like most legislation on complex issues, the bills are a mixed bag founded upon good intentions. On the positive side, these bills:

• Bring more attention and awareness to biomarker tests and their enormous potential;
• Motivate plans to consider new testing coverage; and
• Aim to reduce disparities in health care outcomes and access.

Unfortunately, good intentions do not consistently deliver good legislation. The main concerns with these bills:

• Broad and ambiguous;
• Amplifying the potential for inappropriate usage or adverse outcomes, especially in low-risk patients;
• Unsustainable costs and potential to increase premiums; and
• Confusion and inconsistency in implementation.

As with most legislation, the ultimate success of these bills depends on how they're implemented.

How Health Plans Should Prepare for Biomarker Bills

Plans operating in states that have yet to enact biomarker legislation should assume it is on the horizon. When it is introduced, plans should pay close attention to the language. While the bills are similar, the mandate's impact can hinge on minor details. The definition of terms in the legislation is crucial.

In those states where a law has been passed, insurers should review their existing coverage criteria and medical policies, considering the process by which they were adopted and the clinical and scientific sources supporting them. They should also study their plan documents for evidence of biomarker testing coverage.

Also, plans should assess their appeals process to determine if it is appropriately applied to the coverage mandated by the biomarker law and sufficiently convenient for members. Lastly, insurers should watch the early adopter states to see how those laws are enforced.

How Lab Management Companies Can Help

Ambiguity and imprecision in legislative mandates are not conducive to high-value health care. Broad coverage mandates raise costs for plans and members and do nothing to ensure that members receive the proper test to identify the right care at the correct cost – which should be the goal of all involved. State legislation should be flexible enough to allow insurers to create solutions to get biomarker tests to their members at the right time.

It's essential for plans to realize that, applied correctly, biomarker testing can save them money. A 2020 study of the total cost of care for non-small cell lung cancer patients found that patients who underwent broad panel biomarker testing experienced about $8,500 PMPM reduced cost of care due to optimal treatment. Another study found that commercial payers saw $127,000+ less cost for sequential testing.

Laboratory management organizations can assist plans in complying with updated coverage requirements and managing costs by evaluating tests for their clinical utility, validity, and analytical accuracy. Furthermore, these entities can establish scientifically rigorous policies, reviewed annually and preferably endorsed by an independent clinical advisory board. Utilizing test identification policies grounded in industry-standard DEX Z-Codes^® facilitates easy identification and accurate payment tracking for specific tests by plans.

Conclusion

Biomarker bills are merely the latest in what is likely to be a wave of legislation mandating coverage of new tests and therapies that are part of the growth in precision medicine. This will make it increasingly difficult for plans to control costs and premiums while meeting mandates. Correctly interpreting and implementing these mandates will require payers to adopt a flexible and scalable solution.