The last decade has seen the creation of complex genomic tests, sometimes as the outcome of tens of millions of dollars of research, designed from ground up to solve a recognized clinical problem. These tests, which range in price from $500 to $3000, are the “poster child” for the potential as well as the challenges when genomics and advanced bioinformatics are brought together and enter the clinic. According to a number of published studies, at least some tests in these categories can be net cost-saving in real-world scenarios, in addition to improving medical decision-making.

In March 2012, the local Medicare contractor for all California based laboratories plans to launch an elaborate program for genomic test evaluation, coding, and pricing. This essay discusses major features of the program, as they have been released up to November 2011. The program is likely one of the most distinctive strategic policy efforts proposed by a Medicare contractor in the forty-five year history of the Medicare program.