Medicare claims for genetic cancer tests face growing rejection rates

Both the use of next-generation sequencing (NGS) testing for cancer and the rate of claim denials for such testing increased between 2016 and 2021, despite implementation of a recent Medicare national coverage determination that established coverage standards for NGS testing.

The analysis by Georgetown University researchers and colleagues, and funded by a grant from the National Cancer Institute at the National Institutes of Health, appears April 18, 2025, in JAMA Network Open.

The researchers point to several possible explanations for the increases.

Providers may have been slow to modify how they use advanced genetic testing for cancer in response to the Medicare coverage decision. We've seen evidence of limited responsiveness to national coverage determinations in other contexts." 

So-Yeon Kang, PhD, MBA, Assistant Professor, Department of Health Management and Policy at the Georgetown University School of Health

It is also possible that the claim denials reflect a lag between clinical treatment guidelines and coverage guidelines, Kang notes. Additionally, the researchers believe that uncertainty may remain about coverage standards for advanced genetic testing for cancer in circumstances not addressed by the Medicare national coverage determination (NCD).

NGS is an advanced genomic testing methodology that can identify multiple tumor genetic markers, offering precise information about various tumor mutations that can, in some circumstances, be used in therapeutic decision-making, particularly with treatments that can directly target identified gene mutations.

In 2018, Medicare issued an NCD to codify reimbursement standards for NGS. The NCD was further updated in 2020. Medicare's coverage determination for NGS is the first and only national reimbursement standard for genomic testing.

"We expected that there would be more certainty around how NGS services are covered with the NCD in 2018, but what we found is that there is a lot of uncertainty still, and potentially even growing uncertainty," says Kang. "Additional efforts to reduce uncertainty around NGS coverage and raise awareness of potential financial consequences are necessary."

In their analysis, the researchers looked at close to 30,000 cancer-related NGS claims filed by almost 25,000 unique Medicare beneficiaries, culled from a 20% random sample of Medicare recipients. They found:

• The number of cancer-related NGS testing claims increased nearly 5-fold, from 2016 to 2021;
• The claim denial rate was 16.8% before the NCD in 2018, 20.3% after the implementation of the NCD, and 27.4% after the NCD was amended in 2020 to include hereditary mutations found in breast and ovarian cancers;
• Claims for NGS testing were nearly twice as likely to be denied if they were performed in independent laboratories instead of a hospital but the reason for this is uncertain (about half of claims for NGS were placed outside a hospital);
• Claims were about three times more likely to be denied if they were for testing 50 or more genes; and
• The median charge cost among denied NGS claims, which represents the upper limit of provider or patient liability, was $3,800. If NGS is covered, patients pay nothing.

An outstanding unanswered question is whether, despite increased costs associated with NGS, there have been concomitant reductions in overall care costs because of better diagnostic capabilities thanks to NGS testing. Indeed, Kang, notes, although not directly related to this current study, one of her planned, and recently funded studies, will be an attempt to gain a better understanding of value-based precision medicine and its impacts on financial aspects of such care.

"As more advanced NGS testing replaces lower cost, lower value diagnostic alternatives, we need to know how much this will impact the outcomes of cancer care, which is a key question," Kang concludes.

In addition to Kang, Carole Roan Gresenz, PhD, also participated in the research at Georgetown. Ilina Odouard, MPH, participated in the research at Johns Hopkins Bloomberg School of Public Health, Baltimore.

Kang and her co-authors report having no personal financial interests related to this research.

This research was supported in part by National Cancer Institute grant #3R01CA277599-02S1.