Study: Medicare spends $500M on genetic tests that offer few benefits

New research shows Medicare spends approximately half a billion dollars annually on genetic blood tests that offer little to no clinical benefit, prompting questions about the medical necessity of such tests.

The study, published in the Journal of Hospital Medicine by researchers at the University of Michigan, shows that a blood test designed to identify a genetic abnormality that makes patients more susceptible to blood clots rarely alters treatment recommendations. Typically hospital patients with a history of venous thromboembolism are prescribed medication regardless of the reason behind the clots.

Researchers identified 280,000 claims submitted to Medicare in 2014 for genetic tests for the disorder known as inherited thrombophilia. Each test costs between $1,100 and $2,400, translating to $300 to $672 million in reimbursement. The study did not include claims data from commercial payers, meaning the overall costs to insurers could be far greater.

“Testing for this disorder is almost never beneficial, and in fact can even be harmful because it can cause undue psychological distress for the patient, and unnecessary expense for the healthcare system,” Christopher Petrilli, one of the study’s lead authors, said in an announcement.

Following President Barack Obama’s emphasis on precision medicine, insurers are facing increasing pressure to cover a wide range of genetic tests, prompting payers to determine which tests are effective and necessary. But concerns about medical necessity have also raised the specter of fraud tied to genetic tests that typically come with a high price point.