medicalpracticediagnostictestEveryone in healthcare is being asked to deliver more value these days, so it’s no surprise the pressure is mounting on the diagnostic testing market. As payers take a harder look at which tests deliver value and which do not, providers must stay up on the latest technologies and rulings in their medical practice.
Essentially, the bar is being raised. Simply proving a test confirms or rules out a disease or lesion (clinical validity) is not enough. Tests must now establish usefulness and value for patients (clinical utility). Clinical usefulness is now a required metric for advanced diagnostic tests if they are to be reimbursed by Medicare. And if history tells us anything, most private payers will follow suit.
Here’s an example. Medicare/Medicaid contractor Palmetto GBA has been vetting coverage for molecular diagnostic tests since 2011 and denied a risk stratification test used to identify patients at high mortality risk after early-stage lung cancer surgery. Palmetto found that Pervenio’s Lung RS did not show “clinical utility data on how treatment decisions (i.e., clinical practice) changed with the use of the assay in the practice setting.”
Palmetto also denied a blood test that can be used to determine whether or not patients have a high risk of developing type 2 diabetes within five years and a genotype test aimed at predicting which cardiovascular disease patients would benefit from aspirin therapy.
In contrast, Palmetto approved a biomarker test from Crescendo Biosciences that shows disease progression in patients with early rheumatoid arthritis. Palmetto said the test helps patients and clinicians decide which treatments to use, making it superior to current diagnostics such as the C-reactive protein test.
Similarly, Genomic Health’s Oncotype DX Colon Cancer Assay was approved by Palmetto. It identifies genes in colon tumors to help diagnosticians determine the likelihood of recurrence after surgical resection. Palmetto noted that the test helps physicians identify which patients are most likely to benefit from post-op chemotherapy and which would be better off with a low chemo dose or none.
This shift in emphasis from validity to utility gives providers a tool they can use, along with pricing information, to determine which diagnostic tests provide the most value. We may also see diagnostic technology companies involving payers and providers earlier in their development process, leading to higher degrees of value in tests.

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Last Updated on October 30, 2020