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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 that this is a limited coverage policy for pharmacogenomics testing (PGx) including single gene, 
multi-gene panels, and combinatorial tests. These tests are generally covered (with a few exceptions) as 
described in further detail below to improve safety in the use of specific medications by avoiding potentially 
harmful medications, doses and/or adverse reactions known to occur with certain genotypes. 
 
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. 
 
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. 
 
It is understood that some panel/combinatorial tests may include content that has demonstrated clinical utility 
and some that has not. In such circumstances, this contractor may provide coverage for the components of tests 
that have demonstrated clinical utility when used in the proper clinical context described below. 
 
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. 
 
This LCD does not address (provides neither coverage nor non-coverage criteria) PGx testing for 
anticoagulation dosing, which is addressed by the National Coverage Determination (NCD) 90.1. 
 
Definitions 
For the purpose of this LCD, the following terms are defined as follows: 
Gene  the term gene in this document will be used as a term to encapsulate all of the following: gene, 
pseudogene, and genetic locus. 
 
Single-gene test - a laboratory test to detect relevant genetic variants (alleles) of 1 gene. If two or more 
different single genes are ordered individually but simultaneously, this is not a panel but rather a couple of or 
multiple single gene tests. 
 
Multi-gene panel  a laboratory test to detect genetic variants of at least 2 genes, wherein the clinician does not 
individually order genes, but orders a panel with a specified list of genes. 
 
Combinatorial PGx test  a type of multi-gene panel that requires a proprietary algorithm to evaluate 
pharmacokinetic or pharmacodynamic relationships resulting in drug recommendations or warnings. 
 
Actionable use  A test is considered to have an actionable use when the genotype information may lead to 
selection of or avoidance of a specific therapy or modification of dosage of a therapy. The selection, avoidance, 
or dose change must be based on the FDA-label for the drug, an FDA warning or safety concern, or a CPIC 
level A or B gene-drug interaction. An intended change in therapy based on the result of a genotyping test that 
is not supported by one of these sources is not considered an actionable use for the purposes of this LCD. 
 
Coverage information: 
The clinical record must clearly show the use of or intent to prescribe a drug that has known drug-gene 
interactions that require a PGx test to be ordered to define the safe use of that drug in that patient. If a treating 
clinician orders a single gene test or a test for a particular allele(s), but as a matter of operational practicality, 
the laboratory tests that single gene or allele on a platform that looks for variants in other genes / alleles as 
well, that particular test done in that particular instance is considered a single gene / allele test for coverage 
purposes. In this scenario the provider may bill for the component of the test that was reasonable and necessary 
(in this example, the single gene test). If two or more single genes are tested, rather than a multi-gene panel, 
then the record must reflect that a clinician individually ordered each gene, and each single gene must 
individually be reasonable and necessary at the time they are ordered. Test components that are not reasonable 
and necessary. Genes not identified as having actionable use are not considered reasonable and necessary. The 
algorithms employed in combinatorial testing are also not currently considered reasonable and necessary 
components of multi-gene testing. 
 
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 lead 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 L38394. 
 
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.