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Gene pool: as new genetic tests make their way to market, some managed-care plans are adding them to their lists of covered benefits.

Key Points

* Availability of new genetic tests is increasing about 10% annually.

* While the tests are expensive, they offer the potential for cost savings by determining appropriate treatments and decreasing complications and hospitalization stays.

* The key component for insurance coverage is assuring that tests can direct treatment and impact clinical outcomes for individuals.

The BRCA1 and BRCA2 screening tests have been hailed as revolutionary in helping to predict the prevalence of breast cancer gene mutations. But the expense often deters individuals from getting the blood tests that could potentially save their lives.

A Health Plan of Nevada patient knows the importance of these tests. With her mother currently battling breast and an aunt and grandmother having succumbed to the disease, along with increased odds of getting the cancer because of her ethnic descent, she opted to have the test to determine if she has the gene. The findings showed that as a gene carrier she has approximately an 80% risk of breast cancer and a 25% risk of ovarian cancer by age 70. The test results helped direct her decision to have a bilateral mastectomy and removal of her ovaries, now decreasing her chances of developing breast cancer during her lifetime to less than 10%.

Recognizing the role genetic tests can play in preventing disease some managed-care plans are follting the bill for a growing number of such tests.

Testing has reached a new plateau. "A lot of health plans had historical prohibition against genetic testing and paying for it," said Dr. Skip Freedman, chief medical director of the independent review organization AllMed Healthcare Management. "That was old language based on old genetic testing around chromosomal abnormalities of congenital conditions that didn't impact therapy. Now genetic testing can mean something much different."

Many genetic tests now are able to direct treatment regimens and drug protocols for various diseases.

Growing Demand

The human genome is a complex mechanism composed of 24 distinct chromosomes and approximately 3 billion DNA base pairs of about 25,000 genes. Genetic mutations are responsible for nearly 4,000 hereditary disorders.

"An individual's genotype--or the individual traits that make up a person-continues to be very important in helping determine what treatment options a patient has," said Dr. Alan Muney, chief medical officer of UnitedHealthcare Northeast.

A growing number of genetic tests are contributing to those options. Dr. Joanne Armstrong, senior medical director for Aetna Inc., said there's a 10% annual increase in the availability of new genetic tests and about 1,000 conditions for which tests are available. "The problem is some are clinically useful and some aren't, and it's a big challenge for health plans to figure out what tests are analytically and clinically valid and add value"

Coverage Criteria

Many managed-care plans have established genetic-testing coverage policies.

"Our principles guiding our coverage decisions are the same for genetic tests as for all other medical technologies," said Armstrong. "We basically cover services related to prevention, diagnosis or treatment of an illness. Information has to affect the course of treatment, and improvements should be obtainable outside of an investigational setting. Services also need to be consistent with the plan design."

Aetna looks to many sources to support coverage decisions, including final approval from regulatory bodies such as the U.S. Food and Drug Administration, she said.

Regence also has an established procedure for making coverage decisions. "We respond to requests we get for genetic tests for rare conditions by applying our genetic testing medical policy that outlines several steps for medical reviewers to ask for in documentation from the provider, including a thorough review of each request to determine the likelihood a member has the disease based on family history, determining whether the genome to be tested is scientifically valid and associated with the occurrence of the disease, and ensuring that the information obtained from the tests will result in disease prevention or treatment," said Joanna Zamora, a medical policy clinician.

The key component to coverage, Muney said, is that tests can direct treatment and impact clinical outcomes for individuals. "That allows use of specific therapies that often eliminate broader shotgun approaches for therapies that cause many side effects. If you know a cancer could be treated with a particular drug because a person's genetic make-up will respond to it, then you know you don't have to use five other drugs that may cause adverse reactions."

Oncotype DX is a newer test that helps pinpoint treatment. A number of plans now cover Oncotype, a diagnostic analysis that quantifies the likelihood of breast cancer recurrence in women with Stage I and II, node negative, estrogen-receptor positive breast cancer. "The test looks to see if a patient is going to be responsive to a specific chemotherapy and helps treatment be very smart," said Muney.

Sometimes tests prove ineffective in directing treatment, such as those for Huntington's Disease. The disease results from genetically programmed degeneration of cells in certain areas of the brain, causing uncontrolled movements, loss of intellectual faculties and emotional disturbance. Lack of a cure has prompted many genetic centers to cease offering the test for young people who may have the gene. "The suicide rate among positives tested for the disease was high," said Dr. Allan J. Ebbin, medical geneticist and vice president of health-care quality and education for Sierra Health Services.

Treatment isn't always the only goal. "Sometimes people want to be tested for planning purposes like reproductive decisions," said Ebbin. "Also, if a fetus is detected to have genetic abnormalities, results can give us warning to the special needs an infant may have at time of delivery."

Coverage decision-making doesn't always rest with carriers. A number of plans turn to outside sources, such as independent technology assessment organization HAYES Inc., that provide literature searches, rank genetic tests and assess technologies.


Managed-care plans are taking an active role in genetic testing.

"Genetics will play an increasingly important role in health care and health-care delivery," said Armstrong. "In order to optimize its use, health plans need to support and enhance consumer and physician use of these technologies by helping them understand how to use them efficiently."

Aetna recently developed Web content including interactive decision-support tools for consumers. It also provides phone-based reproductive genetic counseling for members and has incorporated genetics into its disease and patient management programs.

Kaiser Permanente has a large comprehensive clinical genetics program in its Northern Region, complete with five centers staffed with more than 250 geneticists, genetic counselors, nurses and support staff. "When evaluating children, adults and fetuses for genetic conditions, we'll frequently recommend genetic tests in terms of their total evaluation," said geneticist Dr. Ronald Bachman. "If the geneticist (frequently working with a genetic counselor) decides that testing is indicated, he or she will order the test. If there is some question if the test should be done, the geneticist will present the case to other geneticists or genetic counselors in the department for their opinions. No one is looking over their shoulder mad asking why they ordered a $5,000 gene test," he said.

Awareness is increasing. "People are reading articles, surfing the Net and talking to others about genetic tests," said Ebbin. "Take, for example, the development that a change on a particular chromosome is linked to attention deficit disorder. It's a new and exciting finding, and people will read about it and want their children tested."

Dollars and Cents

Genetic testing now comprises only a fraction of most managed-care plans medical spending. While Aetna sees a 20% annual cost trend around testing, Armstrong said genetic testing accounts for less than 1% of its total overall medical spend. "There's a lot of potential around genetic testing, but that potential depends on the science that's ultimately developed and how that science is translated into practice,' she said.

Genetic tests are both costly and cost savers, said Muney. "Initially they're very expensive. However, if you don't spend the money on extraneous drugs that have a shotgun approach and instead are able to choose a drug that at the end of the day does the job, may decrease hospitalization and complications and improve survival, it then becomes the right and cost-effective thing to do," he said.

Not everyone is as convinced. "It's nice in theory that the tests will result in cost savings, but we haven't seen that," said Kaiser Permanente's Bachman.

When tests are done for a prevalent condition such as breast cancer, they could have significant financial impact on a health plan and its premiums, said Zamora. "I expect actuaries will look closely in the future at costs of these tests and that they'll eventually impact the bottom line and premiums. We may even see some benefit limitations."

Cost is just a piece of what health plans need to assess, said Dr. Alan B. Rosenberg, vice president of medical policy, technology assessment and credentialing programs for WellPoint Inc. "The real issue is that a test improves a person's net health outcome. If there's good strong evidence that it does, then it's viewed as medically necessary and an actuarial issue and gets put into the cost of health-care benefits." WellPoint's medical policy technology-assessment committee, comprised of internal and external physicians, assesses whether tests have "a clinically significant effect on improving health outcomes," he said.

Making Its Way

A new area of genetic testing may soon impact health plans' bottom lines.

Pharmacogenomics, which uses markers in individuals' genetic codes to pinpoint the underlying causes of disease, may soon begin to help providers identify sources of an individual's profile of drug response and predict the best possible treatment option. "That should cut down on the number of adverse drug reactions, hospitalization and deaths. In theory it should not only be better practice of medicine, but should also save dollars," said Bachman.

The science is growing. "There are already a few hundred biologic drugs on the market and hundreds more in the pipeline," said Aetna's Armstrong. "Since 2000, about 25%, of new drugs approved by the FDA were biologics." In 2005, Aetna saved $4 million by requiring, as part of a precertification process, Hepatitis C viral genotyping information on more than 2,000 patients, which was used to help manage appropriate pegylated interferon therapy for these members, she said.

What's Next

"Plans are slowly recognizing their old prohibition language about genetic testing is out of date and no longer universally acceptable. [Language] was designed against things that weren't then available. Now there are three or four things available that might make sense for enrollees and that call for different actuarial assumptions and subsequent pricing," said AllMed's Freedman.

But there's still work to be done. AllMed continues to see patient claim denials around genetic testing. "A lot of plans haven't yet had time to come to grips with the new potentials of genetic testing. It can't all be in or out of bounds. For example, plans may want to continue to have uncovered benefits for a test that doesn't make a treatment difference. Plans, however, should consider coverage and cost implications of coverage for anything that makes a treatment difference."

The health-care industry must also wrangle with the problem of limited genetic professionals. Armstrong said there are only about 2,000 certified genetic counselors in the United States today. "Many people think the future of genetics is that primary-care physicians and some specialists will be first-line providers of genetic technologies, but the challenge is that about 70% of nongenetic physicians rate their knowledge of genetics as 'fair to poor' and most clinicians haven't had applied genetics classes in medical school."

Development of new genetic tests, however, will continue. "As the genetic code has been unraveled and diseases that have a genetic basis are uncovered, genetic tests are developed for people who may have those predispositions in their family and then therapies will come." But with more options comes added expense, said Muney. "Expense is fine if the technology is used appropriately. If people are tested or are treated that shouldn't be, then using good technologies inappropriately is unnecessary expense in medicine. This will be an ever-increasing area of focus for the industry because of new technology expenses--on both the testing side and specialty drug side."

Except for possible long-term side effects, Ebbin said health plans will find much value stemming from genetic tests. "We are about decreasing human suffering and creating a better quality of life. If that is what genetic testing can do, we are all for it."

Genetic Testing On the Rise

100 Number of genetic tests available 10 years ago.

1,200 Number of genetic tests available today. The tests can diagnose thousands of health conditions.

Source: Coalition for Genetic Fairness

RELATED ARTICLE: Appropriate use of genetic testing.

While genetic testing is touted as holding great promise for prevention and treatment of disease, some observers have voiced concerns that insurers will misuse genetic information by raising rates or denying coverage for individuals who test positive for certain conditions or are known to be predisposed toward certain conditions, even if they're currently asymptomatic.

Recent legislation may assure that won't happen. In January, a bipartisan group of members of the House of Representatives filed a bill that would make it illegal for group health plans or health insurers to deny coverage or charge higher premiums based on information gleaned during genetic testing. The Genetic Information Non-discrimination Act, H.R. 493, also would bar insurers from requiring or even requesting genetic tests as a condition of coverage, along with barring employers from using genetic information when making hiring, firing or promotion decisions.

Insurers say they don't use genetic test results for their own benefit, for eligibility criteria or to determine pricing.

In 2002, Aetna was the first plan to articulate a policy on appropriate and inappropriate use of genetic data, said Dr. Joanne Armstrong, senior medical director. "The policy was adopted by America's Health Insurance Plans and subsequently by the industry. Basically, it states we won't establish rules of coverage eligibility based on genetic test results, request or require genetic testing as a condition of providing health insurance coverage, use that information for risk selection or classification, or disclose genetic test results that come into our possession without a member's authorization."

The Health Insurance Portability and Accountability Act of 1996 has a hand in protecting genetic data. HIPAA prohibits health insurers from applying "pre-existing condition" exclusions to genetic conditions that are indicated solely by genetic tests and not by actual symptoms. But there are some limitations around the Act. For instance, HIPAA doesn't prohibit insurers from charging higher premiums, prevent carriers from requiring applicants to undergo genetic testing or limit them from collecting genetic information.

"I inform every patient that this information could be used against them and that there are insurability issues around genetic testing," said Dr. Allan J. Ebbin, medical geneticist and vice president of health-care quality and education for Sierra Health Services. Currently, 46 states have laws concerning the use of genetic information.

Dr. Ronald Bachman, a geneticist in Kaiser Permanente's Northern California region, said patients sometimes request that their provider not place certain genetic information in their medical charts. "We tell them before we acquire the information that it will go on the chart and they can opt out of having the genetic test. If we feel the results are important to their medical care, we'll include them in the record, particularly now that we're transitioning to an electronic health record to ensure all providers have necessary information."

Learn More

Aetna Health and Life Insurance Co.

A.M. Best Company # 08189

Distribution: Brokers, consultants, retail network

(pharmacy products)

Kaiser Foundation Health Plan Inc.

A.M. Best Company # 64585

Distribution: National consulting houses,

regional brokers and brokerage firms, membership

exchanges, direct

Regence Blue Cross Blue Shield Cos.

A.M. Best Company # 60074, 60199, 60266,


Distribution: Agents and brokers, direct

Sierra Health & Life Insurance Co.

A.M. Best Company # 07370

Distribution: Agents, internal sales staff, direct

United HealthCare Insurance Co.

A.M. Best Company # 08290

Distribution: Independent agents, brokers, consultants,

exclusive sales force, direct

WellPoint Inc.

A.M. Best Company # 58180

Distribution: Agents, brokers, in-house sales

For ratings and other financial strength information

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Title Annotation:Health/Employee Benefits
Author:Chordas, Lori
Publication:Best's Review
Date:Apr 1, 2007
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