Medicare coverage in the era of precision medicine

By John C. Nelson, MD, MPH

I was pleased to read an insightful editorial discussing precision medicine in the June edition of the Journal of the American Medicine Association. There is great promise for patients in improving their quality of care as well as the potential to decrease the healthcare costs associated with preventable morbidity and mortality.

It is, therefore, a paradox that Noridian Healthcare Solutions, a Medicare Administrative Contractor, recently issued a final coverage decision that significantly limits coverage for tests of highly polymorphic cytochrome P450 (CYP450) drug metabolizing enzymes that could significantly improve the value of precision medicine.

The changes affect coverage of genetic tests for three CYP450 enzymes: CYP2D6, CYP2C9 and CYP2C19. Effective June 21, only testing for CYP2C19 and CYP2D6 is covered, and then only for certain specific medications. CYP2C19 testing will only be covered for patients taking Plavix (clopidogrel). CYP2D6 testing will be covered for patients on amitriptyline and/or nortriptyline, both antidepressants, and Xenazine (tetrabenazine), a medication used to treat Huntington disease.

I served as a charter member of the Prospective Payment Assessment Commission in the 1980s (now known as MedPAC.) We were assigned the task of recommending an update for the payment of DRGs. One of our guiding principles was to make payment decisions relative to technology as neutral as possible—neither fostering nor inhibiting the diffusion of technology.

Physician use of technology is a clinical decision that should be made at the bedside based on medical necessity and scientific evidence. Such should be the case today.

Research has shown that 16.6 percent of hospitalizations in the elderly are due to adverse drug reactions (ADRs). Since costs for hospital in-patient services are 24 percent of Medicare costs, this suggests approximately four percent of Medicare costs could be for ADR-related hospitalizations.

As drug-gene interactions account for one-third of potential, clinically significant interactions, genetic testing has become an important tool in the prevention, diagnosis and treatment of ADRs. Failure to cover pharmacogenetic testing when physicians determine it is medically necessary cannot be considered good medicine or science.

Progress towards Berwick’s Triple Aim will be slowed significantly if payment decisions like this override clinical decisions and prohibit the appropriate use of technology. Denying payment for this testing also runs counter to the goals of President Obama’s precision medicine initiative, which he describes as a national priority. Limiting coverage and accessibility to these tests could adversely impact millions of Medicare patients and cost Medicare many millions of dollars in unnecessary expenditures.


precisionDr. John C. Nelson is a practicing physician in obstetrics and gynecology at the Health Clinic of Utah. In practice since 1975, he became Medical Director at Genelex Corporation in 2013, and served as President of the American Medical Association from 2004-2005. Contact Dr. Nelson at 800-523-3080.