Molecular Diagnostic Tests and Medicare (M00104, V3)

Medicare is a defined benefit program. In order to be considered for Medicare coverage, an item or service must fall within a statutory benefit category. Although IOM 100-2, Ch. 15, Sec 10 identifies "Diagnostic X-Ray tests, laboratory tests, and other diagnostic tests" as a benefit category; Sec. 1862 (1)(A) Statutory Exclusion “except for items and services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member ”must also be applied. In order to be paid under this benefit category, a diagnostic test must be ordered by a physician who is treating the beneficiary and the results used in the management of a beneficiary’s specific medical problem."

Step 1 for Test Assessment: Does the Test Fall Within a Medicare Benefit Category?

Although many molecular diagnostic tests may provide valid and useful information, they do not meet this definition. Based on the Medicare Benefit requirements, the following test types are examples of services that may not be considered a benefit (statutory excluded) and therefore would be denied as Medicare excluded tests:

  • Tests considered screening in the absence of clinical signs and symptoms of disease that are not specifically identified by the law
  • Tests that confirm a diagnosis or known information
  • Tests to determine risk for developing a disease or condition
  • Tests performed to measure the quality of a process
  • Tests without diagnosis specific indications
  • Tests identified as investigational by available literature and/or the literature supplied by the developer and are not a part of a clinical trial

Step 2 for Test Assessment: Is the Test Reasonable and Necessary?

If the test can be described and categorized in the Medicare Benefit, then a “Reasonable and Necessary” determination of the test is made according to Section 1862(a)(1)(A) – “…no Medicare payment shall be made for items or services that "are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of malformed body member.” MolDX starts this process by determining the clinical value/utility of the test – i.e., does the test provide the clinician with actionable data that will improve patient outcomes and/or change physician care and treatment of the patient that results in improved patient outcomes. During the determination the following questions about the test are examined:

  • Who should be tested and under what conditions?
  • What does the test tell us that we do not know?
  • Can we act on the information provided by the test?
  • Will we act on the information provided by the test?
  • Do/Will the results change the outcome?

Step 3 for Test Assessment: Test Assessment Outcome

Based on the answers to these questions, the MolDX program will address test coverage through one of the following methods:

  • Covered without limitations beyond those inherent in its design and purpose
  • Limited coverage (i.e. for specific DX, clinical indications) (LCD)
  • Non-covered determination because the test was not found to be medically reasonable and necessary for the diagnosis and/or treatment of the patient (LCD)

Last Updated: 03/01/2021