Molecular Diagnostics: The Case for Targeted, Recurring Analytics

By Douglas Moeller, M.D., McKesson Health Solutions

As health plans begin to tackle yet another wave of emerging technology - the $8 billion molecular diagnostic testing market - it quickly becomes apparent that managing the utilization of these tests and the therapies they affect will present enormous challenges. G2 Reports and other industry sources have pegged the growth rate of gene testing at more than 20 percent annually.At McKesson, we have reviewed claims data from health plans representing over 50 million covered lives nationwide and our analyses confirm that molecular testing constitutes at least ten percent of laboratory test volume and as much as 30-50 percent of a health plan's spend on clinical laboratory. Digging deeper, we've discovered that 50-70 percent of paid claims for molecular testing involve women aged 18 to 65. Half of this testing is spent on infectious disease probes; the rest is mostly spent on prenatal or neonatal screening for genetic defects and gender-specific malignancy (e.g. breast and ovarian cancer). Testing varies significantly across lines of business. For example, prenatal genetic screening for high maternal age pregnancy appears to be more prevalent in employer insured plans than in Medicaid populations.

All health plans, public and private, need to take a proactive approach to managing this burgeoning area of testing. In doing so, their utilization management strategies need to address three key issues:

• Unique identification of each test. Current coding systems (i.e. CPT and HCPCS) have not kept pace with the technology. Ultimately, each unique test must have its own code. This level of specificity is required for successful utilization tracking.

• Evidence-based, clinical care guidelines and coverage determination. Reliable, objective and current information about the clinical utility (usefulness) of a test must be readily available for review at the time the test is being selected. Real-time decision support is not a luxury anymore - it is a necessity.

• Analytics. "What gets measured, gets managed" is a basic tenet of managed care. In our analyses, we see consistent results that the top 100 molecular tests constitute 75 percent of the total spend in this area; the next 150 tests add an additional 10 percent of spend; the remaining 15 percent involve an assortment of laboratory methodology codes that is nearly indecipherable. The good news is that benchmarks are emerging on a relative basis (e.g., percentage spend on BRCA as a fraction of the total spend) and, more slowly, on an absolute basis (e.g., number of tests expected per 1000 members).

Getting Started To begin to measure and manage, subject matter expertise is essential; the language of molecular diagnostics is complex. An analytics baseline is also essential, despite the pitfalls and lack of precision in the legacy coding process. There is good news here. For the first time, a dashboard with metrics linking specific test volumes and costs to coverage and payment policy compliance is achievable.

Our team has developed a system of unique tracking codes embedded in a master test catalog that allows health plans to follow specific test utilization, such as I discussed earlier, over time with a very high level of confidence. Using this approach, it is now possible to correlate coverage determination policies with specific patterns of test utilization, and employ techniques such as targeted, automated pre-authorization for particularly expensive tests. Evidence-based guidelines are available for more than 400 molecular diagnostic tests (many of the more than 1500 known gene tests simply do not have enough suitable, objective data to analyze for clinical utility). In some cases, a guideline is not enough; access to a qualified genetic counselor is often a cost-effective step in ensuring evidenced-based medical decisions and utilization.

Tackling molecular diagnostics can seem like a daunting task. A good way to get started is to implement an action plan that includes:

• Establishing a baseline • Documenting variation in ordering patterns (by line of business, geography) • Establishing utilization targets for specific coverage determination policies (e.g. breast cancer markers) • Comparing notes with other plans with a focus on improving quality (there are no anti-trust implications for improving quality!) • Repeating your analytics; expecting and documenting your improvement • Staying focused; this is not a "one and done" initiative. You must have the right approach with clear, measurable goals.

Staying a step ahead of emerging technology doesn't happen by accident. Total gene profiling and molecular therapeutics are right around the corner. Considering the rapid growth in molecular and genetic diagnostic testing, it is critical for health plans to develop utilization management strategies today that employ a smart, targeted and recurring analytics approach.

About the Author: Douglas Moeller, M.D., is medical director at McKesson Health Solutions (Newton, Mass.).Staying a step ahead of emerging technology doesn't happen by accident. Total gene profiling and molecular therapeutics are right around the corner. Considering the rapid growth in molecular and genetic diagnostic testing, it is critical for health plans to develop utilization management strategies today that employ a smart, targeted and recurring analytics approach.