Genetic and molecular testing is transforming oncology care, but it is also introducing a new layer of complexity, cost, and clinical risk for health plans.
In 2024, Medicare Part B spending on human genetic tests surpassed $2 billion for the first time, according to a recent analysis from the HHS Office of Inspector General[1] reported by MedTech Dive[2]. Six of the seven oncology-related tests among the top 25 by Part B spend include a screening test for colorectal cancer, liquid biopsy platforms, a minimal residual disease assay, and genomic decision-support tests in prostate and breast cancer.
These tests are among the fastest growing services in healthcare. Yet as adoption accelerates, health plans are increasingly exposed to financial risk, coverage ambiguity, and clinical uncertainty. Three interconnected challenges are driving that exposure: clinical utility, evidentiary support, and appropriate use criteria.
Clinical Utility
Health plans are expected to determine which genetic and molecular tests deliver real clinical value, but evidence of benefit for patients often lags behind innovation in test development. This is especially true for novel testing technologies and tests that involve multiple analytes or complex interpretation algorithms. In one study, 41% of physicians cited insufficient training in selecting and interpreting genetic tests as the single biggest barrier to appropriate use.[3] When ordering providers lack specialized genetics expertise, the results can include inappropriate test selection, misinterpretation of results, and downstream clinical and financial consequences.
For plans, this creates a difficult balancing act of absorbing short-term testing costs while hoping for long-term savings from earlier diagnosis or precision treatment. That balance becomes even more challenging when economic and clinical outcomes data are limited, making it difficult to model return on investment or downstream impact.
Compounding the challenges, plans often struggle to evaluate:
- What specific test was performed
- Whether it is aligned with clinical indications
- Whether the assay itself is scientifically valid
Without transparency and standardization, coverage decisions become more reactive rather than strategic.
Evidentiary Support
Establishing clinical validity and utility is especially challenging because the evidence base for many newer genetic and molecular tests is often incomplete, inconsistent, or difficult to interpret. Health plans need evidence that a specific test improves health outcomes for patients beyond current standards of care. But many genetic and molecular tests lack the strong, long-term data that shows their use leads to better clinical outcomes.[4] Without comprehensive evidence that these tests meaningfully impact patient outcomes, it becomes difficult for health plans to support coverage.
The pace of genomic innovation, particularly with next-generation sequencing (NGS) technologies and whole exome testing, has far outstripped the ability to generate viable, high-quality evidence. New tests enter the market faster than clinical studies of systematic evaluations can validate them.[5] For health plans this creates a moving target:
- Policies struggle to keep pace
- Coverage decisions are made with partial information
- Risk exposure increases with every new test introduced
Appropriate Use Criteria
Even when evidence exists, appropriate use remains a major barrier. Many clinicians lack specialized training in genetics, increasing the likelihood of:
- Tests ordered without clear indications
- Panels that exceed what is clinically necessary
- Results that are difficult to interpret or act upon
The expanding number of commercial testing options only intensifies the challenge. Providers must understand:
- Differences in laboratory methodologies
- Variability in gene coverage and analysis
- The clinical relevance of specific genes tied to a patient’s phenotype
While online tools and guidelines can help, they are not substitutes for expert clinical judgement. These challenges highlight the need for education of ordering providers regarding these tests and their limitations.[6]
How OncoHealth helps Health Plans Regain Control
OncoHealth brings oncology-specific expertise, rigorous evidence evaluation, and real-time policy management to genetic and molecular testing oversight. Our approach ensures:
- The right test
- For the right patient
- At the right time
Health plans are already seeing this category rapidly expand. Within OncoHealth’s comprehensive oncology program, genetic and molecular testing reviews have grown nearly 20% over the past 3 years. At the same time, intervention rates have nearly doubled, highlighting the growing need for careful evaluation and clinical oversight.
In an environment defined by rapid genomic innovation and rising costs, health plans need a structured way to evaluate testing, apply evidence consistently, and guide appropriate use. OncoHealth helps translate genomic advances into disciplined, evidence-based decision-making, closing care gaps while protecting both clinical quality and financial sustainability.
References:
[1] Total Medicare Part B Spending on Lab Tests Rose in 2024, Driven by Increased Spending on Genetic Tests, Office of Evaluation and Inspections, Data Snapshot, January 2026
[2] Genetic testing takes greater share of Medicare Part B test spending, Medtech Dive, February 4, 2026
[3] Limited Genomics Training Among Physicians Remains a Barrier to Genomics-Based Implementation of Precision Medicine, Frontiers in Medicine, March 2022
[4] Billing and Coding: Molecular Pathology and Genetic Testing, Medicare Coverage Database, CMS.gov, January 1, 2026
[5] Coverage and Reimbursement of Genetic Tests, Policy Issues in Genomics, National Human Genome Research Institute, February 6, 2024
[6] P165: Challenges and errors in selecting the most appropriate clinical genetic testing, Genetics Medicine, 2024