Sequence of Events: Genetic Testing Offers Significant Promise, But Coverage and Access Limited

Holland & Knight LLP

Holland & Knight LLP


  • The misdiagnosis of rare diseases, in addition to being traumatic for patients and their families, can be extremely expensive. Shortening the path to diagnosis for rare disease patients may lead not only to increase patient health but also to a significant reduction in overall long-term healthcare costs.
  • Approximately 80 percent of rare diseases have genetic origins, a common factor that points to genetic and genomic testing as logical tools for identifying and ultimately combating these illnesses. For many conditions, however, showing the medical necessity of genetic testing is still a complicated and unpredictable process, something that is partially responsible for the lack of insurance coverage for new genetic testing technologies.
  • Although small-scale studies and other evidence show that the use of genetic testing as a means to more quickly and accurately diagnose patients can reduce overall health expenditures, policymakers still lack systematic data showing the effectiveness of genetic testing as a means of cutting overall health spending at a macro level. However, help could be on the way through a number of different initiatives.

In the world of rare diseases, patient testimonies about the extreme difficulties of receiving an accurate diagnosis for an illness are numerous. For instance, one woman, sick for most of her young life, was not properly diagnosed with idiopathic gastroparesis – an ultra-rare disease that affects stomach motility and digestion – until late in college after seeing numerous different specialists in multiple fields and undergoing a battery of testing.1 Another patient, now active in the rare disease advocacy community, went undiagnosed with familial partial lipodystrophy – a disease that, among other things, causes selective fatty tissue loss – for 37 years.2

Unfortunately, these stories are not unique. One survey indicated that it took on average 7.6 years to properly diagnose a rare disease patient in the United States.3 Another study indicated that a rare disease patient on average consulted eight different physicians before landing on an accurate diagnosis, with only 12.9 percent of respondents indicating that they had seen only one physician prior to diagnosis (23.5 percent of respondents had seen between six and 10 physicians).4 Frequently, rare disease patients exhibit similar symptoms as other, more common diseases, making diagnosis complicated and leaving patients confused and frustrated about a path forward. Further complicating the situation is that traditional treatments for more common illnesses that mimic rare disease symptoms, such as irritable bowel syndrome in the case of the aforementioned gastroparesis patient, may actually worsen a patient's condition.

As such, the misdiagnosis of rare diseases, in addition to being traumatic for patients and their families, can be extremely expensive. One study indicated that over a 10-year period, an undiagnosed rare disease patient cost over 100 percent more than the average patient. This was due in part to a significant increase in outpatient visits compared with the average patient. (The cost differential was heightened in pediatric patients.)5 Such data indicates that shortening the path to diagnosis for rare disease patients may lead not only to increase patient health but also to a significant reduction in overall long-term healthcare costs.

According to the National Institutes of Health (NIH), there may be upward of 7,000 rare diseases in the United States affecting as many as 30 million people, or nearly one-tenth of the U.S. population.6 Alarmingly, only 5 percent of identified rare diseases have an approved treatment. Despite this daunting figure, approximately 80 percent of rare diseases have genetic origins, a common factor that points to genetic (the testing of individual variants or individual/multiple genes and their effects on an individual) and genomic (the study through various methods of an individual's entire genome and its interaction with the environment) testing as logical tools for identifying and ultimately combating these illnesses.

Genetic Testing Becoming More Common

From concept to execution, the Human Genome Project at the NIH took approximately 15 years and involved the creation of the National Center for Human Genome Research (now the National Human Genome Research Institute, an official Institute at NIH), the collaboration of hundreds of national and international scientists, and an approximate, inflation-adjusted total investment of $5 billion.7,8 Since that time, the cost of performing genetic and genomic testing has declined significantly, with a per-genome cost of slightly less than $1,000 in 2019 compared with per-genome costs of approximately $95 million and $30,000 in 2001 and 2010, respectively.9 This significant cost reduction, which has been associated with the development of next-generation sequencing platforms and leaps in computer hardware development, among other things, has opened the door for patients to more readily access these important resources.

Most tests fall into overall categories of DNA diagnostic testing that include single-gene tests, which can detect an abnormality in a gene associated with a particular genetic illness; whole exome sequencing, which sequences the protein-encoding regions of genes; or whole genome sequencing, which is the most rigorous in that it involves sequencing the individual's entire genome. Given the sheer number of rare diseases and the size of the human genome, it is not surprising that there are numerous genetic tests on the market today. One study indicated that there are approximately 75,000 genetic tests on the market, or 10 issued every day.10

However, insurance coverage for these technologies is minimal and inconsistent despite recent positive reception for the increased use of enhanced technologies for patient treatment through the Precision Medicine Initiative, the NIH's Cancer Moonshot and similar programs. One study indicated that coverage for multigene testing varied drastically by disease type and that tests for broad indications or a large range of genes (i.e., those tests that may be helpful in narrowing down disease possibilities in a diagnostic profile) are frequently not covered by insurers.11 It should be noted that some progress has been made on national coverage determinations for some more widely recognized testing technologies. For instance, next-generation sequencing, a revolutionary sequencing technology that sequences genetic material multiple times simultaneously against a reference genome, received a reissued national coverage determination under the Medicare program from the Centers for Medicare & Medicaid Services (CMS) in October 2019.12 However, while this decision was significant as a model for future coverage for genetic testing services, it was only a minor first step in that it was limited only to previously untested patients with ovarian or breast cancer who are Medicare eligible.13

The large and complicated landscape of genetic testing is partially responsible for the lack of insurance coverage for these technologies. For instance, there are only about 200 standardized Current Procedural Terminology (CPT) codes to identify various types of genetic tests to insurers, other physicians, hospitals and health systems, limiting the ability for payers to systematically cover these technologies. This is especially true when applying "medical necessity criteria," which requires a provider to submit accurate information showing that a treatment or test is medically necessary to treat or diagnose a specific illness in order for it to be reimbursed by a payer. Data have shown that a majority of spending in the past several years on genetic tests has gone to noninvasive prenatal tests, cancer screening tests and multiple-gene analyses.14 This is unsurprising given that some of these technologies target pre-identified, validated markers and that newer screening methods present fewer risks for patients than other, more traditional or invasive testing methods.15 For many conditions, however, showing the medical necessity of genetic testing is still a complicated and unpredictable process when a patient is in the middle – or beginning – of his or her diagnostic odyssey.

Thus, coverage of new genetic testing technologies continues to remain a major challenge for the medical community and a mystery for the tens of millions of U.S. patients with rare diseases. Although small-scale studies and other evidence show that the use of genetic testing as a means to more quickly and accurately diagnose patients can reduce overall health expenditures, policymakers still lack systematic data showing the effectiveness of genetic testing as a means of cutting overall health spending at a macro level.

Help on the Horizon?

Bills have been introduced as recently as the 116th Congress that would create demonstration projects to test coverage of genetic testing technologies for certain patients to help inform future expansions of genetic testing coverage. In addition, Reps. Diana DeGette (D-Colo.) and Fred Upton (R-Mich.), the original champions of the 21st Century Cures Act,16 recently issued a request for information to help inform a follow-on version of the landmark legislation dubbed "Cures 2.0."17 One of the main focuses of their inquiry is into "how Medicare coding, coverage, and payment could better support patients' access to innovative therapies." Expanded coverage to increase access to genetic testing technologies could certainly fit within this scope and would help supplement expanded access and coverage of other new and innovative healthcare technologies for rare disease patients.

Stakeholders across the rare disease landscape have also shared consistent concerns with the length of time between when a new or breakthrough medical technology is approved and when it receives coverage by insurers. Underutilized programs may help speed new technologies to the patients that need them by shortening the gap between approval and coverage. One such example is the U.S. Food and Drug Administration (FDA)-CMS parallel review program for medical devices, which was recently touted by U.S. Department of Health and Human Services (HHS) Deputy Secretary Eric Hargan at the recent FDA/CMS Summit18 and through which a next-generation sequencing test received a parallel approval and coverage determination in 2017.19 These efforts may help the scientific community and others assemble data about how greater access to these technologies positively affect patient care, provide information necessary for lawmakers to empower CMS, the FDA and others to work together on increasing coverage and access, as well as to create mechanisms to speed new technologies to patients in need.

In addition to testing expansion of coverage and access for genetic and genomic testing, further investments should be made into public-private partnerships and other information gathering networks that may centralize information from a diverse group of medical professionals to provide patients additional resources for rare disease diagnosis. For instance, the Undiagnosed Diseases Network, housed at the NIH, utilizes a dozen sites nationwide where teams of physicians assess rare disease patients and share data, including genetic testing data through a "sequencing core," to maximize the amount of national expertise available to pin down rare disease diagnoses that would be extremely difficult and expensive to receive if patients sought expertise individually.20 In addition to further investment in these resources, continued policy development and investment in the development of artificial intelligence technologies and diagnostic support software tools, which have shown promise in assisting physicians in the early detection of rare disease through symptom analysis,21 will provide additional means for patients to receive care more quickly through largely noninvasive means.

Finally, payers – both public and private – may lack expertise in understanding and evaluating genetic tests, especially for rare diseases. Insurers should prioritize hiring individuals to supplement their teams who have some form of advanced knowledge not only of rare diseases but also the nature of genetic testing technologies and how they are used to expedite disease diagnoses. This is especially true given the rapid development of new testing systems and the growing use of other diagnostic technologies promoted in part by provisions in the 21st Century Cures Act and other legislation.

While it typically refers to something that is uncommon, the term "rare" can also imply heightened value. Greater investment in improving the diagnostic odyssey for rare disease patients, including through greater coverage of new technologies, can only enhance the value and efficiency of the U.S. healthcare system for all patients – not just the few.


1 DeBellis A. From Horses to Zebras: My Rare Disease Journey. Global Genes. March 28, 2018.

2 Howley EK. Who Can Help Me With a Rare Disease? U.S. News & World Report. July 2, 2018.

3 "Spotlight on rare diseases." The Lancet Diabetes & Endocrinology. February 2019. 7(2):75.

4 Grier J. et al. "Diagnostic odyssey of patients with mitochondrial disease." Neurology Genetics. April 2018. 4(2):e230.

5 Imperial College Health Partners. A preliminary assessment of the potential impact of rare diseases on the NHS. November 2018.

6 FAQs About Rare Diseases. National Center for Advancing Translational Sciences, Genetic and Rare Diseases Information Center.

7 National Human Genome Research Institute. International Consortium Completes Human Genome Project. April 14, 2003.

8 National Human Genome Research Institute. NHGRI History and Timeline of Events.

9 National Human Genome Research Institute. DNA Sequencing Costs: Data.

10 Lewis R. 10 New Genetic Tests Reach the Market Each Day. Medscape. May 8, 2018.

11 Phillips KA, et al. Payer coverage policies for multigene tests. Nature Biotechnology. July 2017. 35(7):614-617.

12 Proposed Decision Memo for Next Generation Sequencing (NGS) for Medicare Beneficiaries with Advanced Cancer (CAG-00450R). Centers for Medicare & Medicaid Services. Oct. 29, 2019.

13 Id.

14 Phillips KA, et al. Genetic Testing Availability And Spending: Where Are We Now? Where Are We Going? Health Affairs (Millwood). May 2018. 37(5):710-716.

15 Id.

16 Public Law 114-255.

17 Cures 2.0.

18 Wang B. HHS Officials Plug Parallel Review As Way To Spur Innovative Therapies. Inside Health Policy. Dec. 10, 2019.

19 Mezher M. FDA, CMS: Second Parallel Review Decision Ever for NGS Test. Regulatory Focus. Dec. 1, 2017.

20 Undiagnosed Diseases Network: About Us. National Institutes of Health.

21 Ronicke S, et al. Can a decision support system accelerate rare disease diagnosis? Evaluating the potential impact of Ada DX in a retrospective study. Orphanet Journal of Rare Diseases. March 21, 2019. 14(69).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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