4 Strategies for Molecular Diagnostic Labs to Maximize Reimbursement

May 22, 2017 By: Quadax

At the forefront of innovative medical technologies, genetic laboratories are making breakthroughs in testing and treatment that confer significant benefits to patients.

After overcoming regulatory hurdles to bring these procedures to market, however, the essential task of moving that test or treatment from unlisted to commercially reimbursable is a long road fraught with difficulties.

Commercial insurance companies are concerned about the impact of genetic advancements, on both patient care and the financial bottom line. Yet even today, with ever-greater developments in predictive testing, very few of them have standard operating procedures for integrating molecular diagnostic, genetic, or pharmacogenetic services into coverage.

What’s a lab to do? Here are four strategies to help innovative labs navigate the road to maximum reimbursement.


Good documentation is the cornerstone of a successful lab. A lab’s record keeping is critical for meeting accreditation and regulatory requirements, securing funding, and demonstrating clinical utility, particularly with regard to reimbursement. Where can you turn for assistance?

Organizations like the American College of Medical Genetics and Genomics offer standards and guidelines for clinical genetics laboratories on everything from quality control, record storage, and accessibility of patient test records, to release of information, computer systems and specimen handling.

Following best practices for precise, thorough documentation will enhance your ability to demonstrate value.


Sales can often feel like a catch-22 for labs; without sales, there aren’t enough utilization numbers for an insurance company to consider covering a test. Doctors are less likely to order non-covered tests, resulting in lower utilization numbers. Sales volume is necessary to generate the results and documentation needed to mount a campaign for coverage. How can you improve your sales strategies?

Profile your account, know the purchasing decision-makers, select appropriate physician champions, and recognize that there are a number of parties involved in the implementation process. Sales in the medical technology sector is a long cycle that can easily span 12 to 18 months; plan accordingly. Following these steps can help you secure a spot in the marketplace.


Appeals are a given in this industry. There is a temptation to ignore the process, since appeals can be expensive and time-consuming. However, decreased reimbursement and non-coverage means fewer resources for developing new testing technology. Even the most innovative of clinical laboratories are at risk of discontinuing services due to these pressures. How can you manage appeals successfully?

Develop an action plan. Following payer requirements to the letter serves a twofold purpose; first, it ensures an appropriate level of reimbursement, and second, it helps facilitate the establishment of your test or procedure as industry standard. Remember that payers are your clients, too, and approach the relationship as collaborative as opposed to adversarial. Don’t be afraid to ask payers for details; a letter stating “medical records required” may actually be requesting a specific test result or report. In an effort to direct claims properly, some payers utilize special forms for unlisted services. Familiarize yourself with those forms and requirements. If the appeals process overwhelms you, seek out a medical billing company experienced in patient advocacy. 


Researching and planning appropriately for the peer review process is imperative for a lab intending to go commercial. Without good documentation, it’s difficult to prove clinical utility, which can be dependent on a stakeholder’s perspective of the supporting evidence. Demonstrating clinical utility is invaluable because it speeds the translation of clinical research to medical practice, and is a significant part of qualifying for publication in a peer-reviewed journal. In a “publish or perish” environment, the pressure is on.

The Journal of Molecular Diagnostics’ scientific integrity policy not only identifies common issues relating to scientific conduct, but outlines good practices for labs. The US DHHS’ Office of Research Integrity is another resource for research guidelines; their Peer Review site includes documentation on responsible authorship in the peer review process, a Peer Review Quick Guide, and a data analysis tool useful for administrators, clinical staff, and other personnel involved in the research process.

CMS recognized growing concerns over the quality of evidence being used as the basis for coverage decisions on new treatments and services. In 2005, CMS launched Coverage with Evidence Development (CED) as a conditional reimbursement mechanism in order to facilitate high-quality evidence development prior to issuing broader coverage determinations. Clinical trials or studies may be able to utilize CED to develop stakeholder consensus on everything from protocols, outcome measures, and legal contracts to claims adjudication, billing and coverage negotiation. This, in turn, can improve trial participation, minimize additional operating costs, and maximize reimbursement.


Palmetto GBA, a Medicare Administrative contractor (MAC), developed MolDx in 2011. MolDX determines coverage, coding and pricing for new and existing molecular diagnostic tests (MDTs), laboratory developed tests (LDTs) and other molecular pathology services for labs within Palmetto GBA’s jurisdiction. The MolDX Manual is a good resource with information on obtaining coverage for an established MDT or LDT.

Evidence Street™ by Blue Cross Blue Shield (BCBS) is a web-based evidence review platform providing objective information for those delivering and managing medical care. Operational since November 2016, Evidence Street assessments are based on clinical and scientific evidence and evaluate whether a technology improves net health outcomes. While MolDX makes coverage determinations, Evidence Street does not, although insurance companies use its data in their own coverage determinations. In fact, Palmetto has committed to leveraging the Evidence Street Opinions in their own coverage process beginning in 2017. Evidence Street publishes approximately 460 evidentiary reviews per year; twenty percent of those reviews are in the genetics and molecular diagnostics space.


In the quest to move a test or procedure from unlisted to covered, there are a number of things a lab can do to get started on the right path. Maintaining good documentation, strategically building sales, facing appeals head-on, and providing evidence can help you position your lab effectively on the road to commercial status.


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