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Demystifying MRD Testing: Understanding Its Purpose, Billing, Reimbursement, and Strategies for Success
December 10, 2024
Minimal residual disease (MRD) testing has emerged as a critical companion diagnostic tool in personalized oncology medicine. However, its billing and reimbursement landscape is complex, requiring labs to navigate unique challenges. In this blog, we’ll explore how MRD testing is billed, how labs secure reimbursement, and strategic approaches to optimize financial outcomes.
MRD refers to the small number of cancer cells that remain in the body during and after treatment. Monitoring MRD can help identify a potential relapse, allow tailored treatment strategies, and improve overall patient outcomes.
MRD testing is a highly sensitive method for detecting minimal amounts of cancer-derived DNA when cancer cells are otherwise undetectable by traditional imaging and standard laboratory tests. This residual, or remaining, cancer-derived DNA may lead to disease recurrence without further treatment. Therefore, identifying unique genetic markers through MRD testing can be crucial in determining the most effective treatment strategies and improving patient outcomes.
Unlike other tests, MRD testing often requires multiple assessments over a patient’s treatment journey, making it not only unique from a billing and reimbursement perspective – but very complicated.
Key Challenges in MRD Reimbursement
- Coding Complexity: The primary billing code used for MRD testing, 81479, is a generic CPT code for unlisted molecular pathology procedures. Because it lacks a specific fee on the Clinical Laboratory Fee Schedule (CLFS), reimbursement can be complicated.While many payors have reimbursement policies in place for CPT code 81479, further negotiation may be necessary to secure appropriate payment for the service. For example, some labs negotiate carve-outs in their contracts, where payors agree to reimburse a set percentage of the lab’s charge amount.Others secure Proprietary Laboratory Analyses (PLA) codes, which are test-specific and allow for direct negotiation with payors. Labs utilizing a PLA code will need to negotiate a payment rate with each payor.
- Inconsistent Reimbursement Policies: Payors lack a uniform approach to covering MRD testing. Some payors approve MRD tests as part of a surveillance strategy, while others may deny coverage outright or require extensive documentation. Medicare coverage policies also differ by Medicare administrative contractor (MAC) region. Some MACs provide coverage for specific MRD tests and define which additional MRD tests might be covered if not specified within the Local Coverage Determination (LCD) or Local Coverage Articles (LCA). Other MACs only provide coverage information for MRD testing under the more general term “biomarker testing,” and have less test-specific coverage and billing/coding policies.
- Prior Authorizations (PAs) and Documentation Requirements: Payors often require detailed documentation to approve PAs for MRD tests, which can delay testing. MRD testing requires comprehensive and precise documentation to justify medical necessity and secure reimbursement. In addition, payors may question the frequency of testing and scrutinize the necessity of repeating claims for the same patient.
- Denials: Even with approved PAs, claims can be denied due to inconsistent payor policies or lack of coverage criteria. MRD testing is not a one-time procedure; it is often performed periodically over time to monitor disease progression or remission. Labs must carefully track and justify test frequency to avoid reimbursement issues, adding to operational complexities.
Strategic Approaches to Optimize MRD Reimbursement
To navigate the billing and reimbursement challenges of MRD testing, labs may want to consider implementing these strategies:
Leverage Market Access Insights to Support Payor Negotiations
To support payor negotiations, focus on gathering and analyzing utilization data to build a strong case for reimbursement. Emphasize the growth of MRD testing and its demonstrated clinical value, drawing from the scientific literature to justify coverage and favorable reimbursement terms. Highlight the impact of MRD testing on patient outcomes, including more effective treatment decisions, reduced relapse rates, increased survival rates, and long-term cost savings for healthcare systems.
Engage with payors to define clear reimbursement rates for CPT code 81479, ensuring these rates are explicitly outlined in contracts to minimize the risk of claim denials or underpayments. Leverage reimbursement data from similar tests to establish a solid, competitive benchmark that strengthens your negotiating position.
Consider bundling MRD tests as part of a comprehensive care package to align with patient needs and payor expectations. For example, it might be possible to negotiate a fixed single rate for a series of MRD tests conducted over a two-year surveillance period. This approach not only offers more predictable revenue but also underscores the value of continuous patient monitoring in achieving improved outcomes.
Utilize Robust Prior Authorization Processes – Integrated with RCM
Navigating the complexities of PA processes for MRD testing can present significant challenges. Leveraging technology to streamline PA and integrating it with revenue cycle management (RCM) is key to addressing these hurdles.
Partnering with technology providers that automate PAs through API integrations can drastically reduce turnaround times. For instance, integrating PA systems with laboratory information systems (LIS) facilitates seamless communication, ensuring quicker responses and reducing delays. This is particularly important for Medicaid payors, where close coordination between laboratories, PA partners, and payor systems is essential, as access to specific systems often needs to be granted.
Payors vary in their approach to MRD testing. Large national commercial payors often have well-defined medical policies that, when met, enable approvals within a few business days—or even instantly. These payors have very specific guidelines for the patient’s condition or diagnosis where the MRD test may be approved and covered. In contrast, smaller payors may have extended processing times, sometimes taking up to 90 days, and may not have medical policies for specific patient situations.
A level of complexity to be considered is the “serial testing” nature of MRD, which involves multiple iterations of testing over time to track the disease progression or regression. This requires robust coordination among all stakeholders, including laboratories, payors, PA providers, and RCM teams, to avoid issues such as duplicate request assumptions caused by system configurations. Ultimately, having robust systems in place and strong coordination will result in a more efficient process and, hopefully, a more minimal burden and less stress on the patient and provider.
Learn more about the benefits of automating prior authorizations through API integrations.
Educate Patients on Payment Responsibility and Provide Payment Options
Providing clear and accurate cost estimates and explaining available payment options empowers patients to make informed decisions about their care, alleviating the stress and uncertainty often associated with medical billing. Transparency in communication also builds stronger patient-provider relationships, ensuring patients feel supported throughout their treatment journey.
Moreover, proactive education on cost and payment options can significantly improve revenue capture and reduce billing-related complications for healthcare providers. By addressing questions and concerns about insurance coverage, out-of-pocket expenses, and financial assistance programs early in the process, providers can minimize claim denials, reduce unpaid balances, and enhance patient satisfaction. For MRD testing, which often involves advanced technology and specialized interpretation, this upfront dialogue ensures patients are fully informed and engaged, ultimately leading to better compliance with testing protocols and a more seamless billing experience for all parties involved.
Learn more about the hidden benefits of accurate upfront cost estimates.
The Path Forward: Partnering for Success
MRD testing’s growing prominence underscores the need for strong market access strategies and robust payor relationships. Success hinges on partnerships that streamline processes, such as automated prior authorizations, and provide actionable insights for contract negotiations.
By working with experts in billing, prior authorizations, and payor dynamics, labs can navigate this complex landscape and secure the reimbursement needed to sustain their operations and deliver critical care to patients.
Contact our team today to learn more about billing and reimbursement strategies for MRD testing.