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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say for Medicare to consider coverage and payment for any item or service, the information 
submitted by the supplier or provider must corroborate the documentation in the beneficiary's medical 
documentation and confirm that Medicare coverage criteria have been met. You can see this in the Centers for 
Medicare and Medicaid Services, Internet Only Manual, Publication 100-08, Medicare Program Integrity 
Manual, Chapter 3, Section 3.3.2.1. 
 
The rules say that PGx testing is considered reasonable and necessary in limited circumstances as described 
below as an adjunctive personalized medical decision-making tool once a treating clinician has narrowed 
treatment possibilities to specific medications under consideration for use, or is already using a specified 
medication, based on other clinical considerations including the patients diagnosis, the patients other medical 
conditions, other medications, professional judgment, clinical science and basic science pertinent to the drug, 
and the patients preferences and values.1 
 
PGx tests must demonstrate analytical validity, clinical validity, and clinical utility to be considered reasonable 
and necessary for coverage. This is demonstrated through a required technical assessment of the test. PGx tests 
are considered germline tests and must adhere to other relevant germline testing policies published by this 
contractor. 
 
Clinical Indications 
PGx tests are indicated when medications are being considered for use (or already being administered) that are 
medically necessary, appropriate, and approved for use in the patients condition and are known to have a 
gene(s)-drug interaction that has been demonstrated to be clinically actionable as defined by the FDA (PGx 
information required for safe drug administration) or Clinical Pharmacogenetic Implementation Consortium 
(CPIC) guidelines (category A and B). 
 
 The selection of the medications in question must be derived from clinical factors/necessity rather than from a 
PGx test. Once the putative therapeutic agents are selected, and those agents are known to have gene-drug 
interactions as identified above, then a PGx test may be considered reasonable and necessary when the result of 
that test is necessary for the physicians decision-making process regarding safely administering or dosing the 
drug. 
 
PGx testing is not considered reasonable and necessary merely on the basis of a patient having a particular 
diagnosis. Unless the record reflects that the treating clinician has already considered non-genetic factors to 
make a preliminary drug selection, PGx testing is not considered reasonable and necessary. 
 
Technical requirements 
The treating clinician receiving the laboratory report must be able to use the genetic information presented to 
guide treatment. To accomplish this, the laboratory must clearly report the clinical significance of the resultant 
genotype, based on empirical data or validated methodologies, as an annotation or interpretation. For clarity, 
the report should document the specific genotype-drug interaction that led to the resultant interpretation. 
 
A lab may test for a reference allele as a matter of exclusion (e.g. report that a patient has a reference allele 
when alternate alleles are not found). However, in such cases, the report must identify which allele is the 
reference allele and that the reference allele is reported as a matter of exclusion. 
 
Noncovered Indications 
PGx testing is not covered when a treating clinician is not considering treatment with a medication that has an 
actionable drug-gene interaction, or when the use of a medication with a drug-gene interaction is not reasonable 
and necessary. 
 
Special Documentation Requirements 
In order for any of the above services to be covered, the patients medical record must clearly reflect the 
following: 
The patient has a diagnosis for which pharmacologic therapy is reasonable and necessary, and the drug or drugs 
that the clinician is considering using must be reasonable and necessary for the treatment of the patients 
diagnosis. 
The clinician has made an initial personalized decision for the patient based on the patients diagnosis, the 
patients other medical conditions, other medications the patient is taking, professional judgement, clinical 
science and basic science pertinent to the drug (e.g. mechanism of action, side effects), the patients past 
medical history and when pertinent family history and the patient's preferences and values. 
The provider performing the service must have a record of what drug(s) is/are being considered and for what 
indication(s) to ensure the test performed is reasonable and necessary. You can find these rules in the Local 
Coverage Determination (LCD) MolDX: Pharmacogenomics Testing L38337. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.