In their study, “Private Payer and Medicare Coverage Policies for Use of Circulating Tumor DNA Tests in Cancer Diagnostics and Treatment,” in this issue, Douglas et al¹ have examined coverage policies for circulating tumor DNA (ctDNA) tests among private payers in the United States and the Medicare program. ctDNA tests have been increasingly used in clinical practice to select targeted therapy, identify disease progression, and measure minimal residual disease after treatment. In addition, ctDNA tests represent diagnostic options for cases in which tissue biopsy is unavailable or contraindicated. The examination of coverage policies for ctDNA tests helps inform the broader question of how new and emerging technologies are incorporated by payers in the United States, a topic that has been the focus of recent regulatory and legislative initiatives.

In January 2021, CMS published a final rule establishing a pathway to expedite access to innovative devices for Medicare beneficiaries. This was called the “Medicare Coverage of Innovative Technology” (MCIT) pathway.² Under the MCIT, new and innovative medical devices designated as part of the FDA’s Breakthrough Devices Program would be automatically granted nationwide coverage by the Medicare program for 4 years starting on the date of FDA market authorization (or on a date up to 2 years after the FDA market authorization at the request of the device manufacturer).² At the end of the 4-year coverage period, CMS would determine whether to issue a national coverage determination or to leave it for local Medicare administrator contractor (MAC) to issue local coverage decisions. This rule would have granted immediate nationwide Medicare coverage to the 2 ctDNA tests currently commercially available, Guardant360 CDx and FoundationOne Liquid CDx, both of which have been designated as part of the FDA’s Breakthrough Devices program.^3,4

MCIT’s implementation was delayed, and the rule was ultimately rescinded on November 2021. Among other reasons, the MCIT raised concerns that, once the products were covered, there would be few incentives for device manufacturers to conduct additional studies on their products.⁵ This is an important concern because the clinical trials used to examine breakthrough devices often enroll patients who are significantly different than the population of Medicare beneficiaries—clinical trial participants are often younger or have fewer comorbidities, for example.⁵ In this case, without further studies, the evidence about benefits and risks of breakthrough devices among the Medicare population would remain very limited and, after 4 years, CMS would still lack robust information to make informed coverage decisions. It would also be very difficult to rescind coverage after a device had been on the market for 4 years. MCIT’s provisions, however, became part of a bill introduced in March 2023 in the House of Representatives with bipartisan support: H.R. 1691, the “Ensuring Patient Access to Critical Breakthrough Products Act” of 2023. Meanwhile, CMS has continued to work on options to expedite Medicare coverage of new and innovative medical devices, although no final rule has been issued yet.⁶ In addition, CMS has other mechanisms that help support the expedited coverage of new devices in Medicare, such as a parallel review program in which manufacturers may opt to have CMS and the FDA simultaneously review a new product, and the coverage with evidence development pathway, through which Medicare covers a new product conditionally on collecting additional evidence on the benefits and risks of the product in the Medicare population.⁵

As Douglas et al have shown, coverage of ctDNA tests has been increasing in the Medicare program and among private payers even in the absence of legislative or regulatory coverage requirements.¹ They found that, although CMS had not issued a national coverage determination on ctDNA tests, in October 2022, 100% of Medicare local coverage decisions and 70% of private payers’ policies provided coverage for at least one of the ctDNA testing indications studied. A comparison to a previous study that examined private payer and Medicare coverage of ctDNA testing between 2015 and 2019 showed that not only the number of policies covering ctDNA tests has increased but also that an expansion in the covered indications and cancer types has occurred, both among private payers and within the Medicare program.¹ It is likely that such expansions reflect the increased number of indications, cancer types, and target drugs for which these tests have received approvals over time.¹

In the context of private payers, the authors found that 1 of every 4 ctDNA coverage policies was cobranded with laboratory benefit managers (LBMs).¹ LBMs help insurers determine the tests that the insurer will cover, the patients who will be eligible to undergo the tests, the clinicians who can order them, and the service providers who can deliver the tests.⁷ Because of their key role in establishing coverage and in negotiating prices with service providers on behalf of insurers, LBMs can significantly influence spending on diagnostic tests. This is important because of the large size of the diagnostics market—estimated at more than $100 billion a year—and the increasing contribution of genetic testing to laboratory test expenses. Genetic testing is estimated to have grown to 20% of expenses, up from about 5% a decade ago.^7,8 The role of LBMs in the Medicare market is unknown, but MACs, the entities that establish local coverage decisions for ctDNA tests for Medicare beneficiaries, are private health insurers.⁹ The role of LBMs in driving coverage policies, the presence of conflicts of interest, and the potential spending implications are important areas for further inquiry in both Medicare and the private insurance market.

Expanding coverage policies is important to increase patient access to ctDNA tests. However, not all payers publish their coverage determinations, and those who do may restrict access to ctDNA tests. Douglas et al reported that the language of ctDNA test coverage policies was complex and varied significantly across payers,¹ which could compromise patient and provider adoption of these tests. In addition, the authors found that access to ctDNA was restricted for patients without available tissue or with contraindicated biopsy samples in 91% of private payer policies and 100% of Medicare policies.¹ Understanding barriers to access, including cost-sharing and prior authorization requirements placed by payers, is critical to inform policies aimed at expanding access to ctDNA tests and other innovative technologies. This is an underexplored area that represents a promising avenue for future research.

Beyond the clinical benefits to individual patients, increasing access to ctDNA tests may also contribute to generating real-world evidence on the benefit and safety profile of these tests among broader populations. This is especially important for Medicare beneficiaries, who are often underrepresented in the clinical trials used to examine ctDNA tests.⁵ In addition, as the adoption of ctDNA tests continues to grow and their approved indications, cancer types, and target drugs continue to increase, the spending patterns associated with ctDNA tests will continue to evolve. In this context, real-world evidence can also help inform cost-benefit assessments of ctDNA tests, furthering the understanding of the cost implications of these technologies and helping inform decisions in clinical practice.