Advanced Genetic Testing Under Pressure: The Rising Tide of Claim Denials in Cancer Diagnostics

In recent years, next-generation sequencing (NGS) has emerged as a transformative tool in oncology, offering precision insights that shape diagnosis and treatment. But while the clinical value of these advanced genetic tests continues to grow, so too does the friction between innovation and insurance infrastructure. A clear pattern is now emerging: as NGS testing becomes more widespread in cancer diagnostics, so does the rate of insurance claim denials—particularly following the implementation of Medicare’s national coverage determination (NCD) for NGS.

A Data-Driven Surge in NGS Adoption

Between 2016 and 2021, healthcare systems across the United States saw a marked increase in the use of NGS for identifying genetic mutations in cancer patients. These tests, often used to guide targeted therapies or assess eligibility for clinical trials, were heralded for their clinical precision. At the same time, the Centers for Medicare & Medicaid Services (CMS) introduced more formalized NCD criteria to standardize coverage.

While the NCD was designed to provide clarity—stipulating that tests must be conducted in CLIA-certified labs using FDA-approved platforms for certain cancer types—it inadvertently contributed to a secondary trend: a steady rise in insurance claim denials, especially for tests that fell outside the narrow bounds of the approved use cases. For clinicians and institutions, the result has been a paradox—greater reliance on a powerful diagnostic tool accompanied by growing reimbursement uncertainty.

The Hidden Costs of Precision Medicine

For healthcare providers, the increase in denied claims carries significant implications. Financially, it shifts the burden of high-cost diagnostics onto patients or institutions. Operationally, it adds layers of administrative complexity, demanding meticulous documentation, pre-authorization efforts, and appeals processes. And clinically, it may lead to delayed or suboptimal care if testing decisions are swayed by reimbursement concerns.

The challenge lies in navigating a reimbursement landscape that hasn't fully caught up with the pace of genomic medicine. Even when tests are clinically appropriate, they may fall outside the specific parameters defined by CMS, or be subjected to varied interpretations by commercial payers.

Implications for Clinical Practice

Understanding the nuances of Medicare’s NCD is no longer optional—it’s a clinical imperative. Providers must now consider not only the scientific rationale for ordering NGS but also the insurance implications for each patient. For example, testing for a rare mutation in a less common cancer subtype may be justified clinically but still be deemed ineligible for coverage under current guidelines.

These challenges are further compounded in community oncology settings, where access to reimbursement specialists or genetic counselors may be limited. Physicians in these environments are often left to navigate the reimbursement process without the institutional support typically found in academic medical centers.

Pushing for Policy Evolution

Advocacy efforts are gaining traction as more clinicians, researchers, and healthcare organizations voice concerns over the disconnect between CMS policy and evolving standards of care. There is growing recognition that as genomic testing becomes standard practice in oncology, coverage policies must evolve to reflect the broader spectrum of clinically relevant use cases.

Professional societies, such as the American Society of Clinical Oncology (ASCO) and the Association for Molecular Pathology (AMP), continue to press for expanded and more flexible coverage frameworks. They argue that denying coverage for tests with established clinical utility not only hampers care but also undermines efforts to advance personalized medicine.

A Road Forward

The friction between clinical innovation and reimbursement policy is far from resolved. But awareness of these issues—and the ability to strategically manage them—is a critical step forward. For providers, this means investing in workflow support systems that help identify covered indications, streamline appeals, and educate patients on their financial exposure. For policymakers, it signals the need for more adaptive, evidence-based coverage criteria that reflect the real-world application of NGS in modern oncology.

In the meantime, the dual rise of NGS testing and insurance denials tells a cautionary tale: without alignment between clinical value and payer policies, the promise of precision medicine risks being stymied not by science, but by systems.