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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 molecular diagnostic laboratory tests must undergo an application and technical assessment 
process through the Molecular Diagnostics (MolDX) contractor. MolDX will review all new test/assay clinical 
information to determine if a test meets Medicares reasonable and necessary requirement. Labs must submit a 
comprehensive dossier on each new test/assay prior to claim submission. MolDX will only cover and 
reimburse tests that demonstrate analytical and clinical validity, and clinical utility at a level that meets the 
Medicare reasonable and necessary requirement. Only approved tests will be reimbursed consistent with the 
effective date of the coverage determination. You can find this rule in the Local Coverage Determination 
(LCD): MolDX: Molecular Diagnostic Tests (MDT) L35160. 
 
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. 
 
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. 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. 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). 
 
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. 
 
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. 
 
Since the medical necessity for testing a gene in PGx can only come from the ability of that test to inform a 
management decision based on a gene-drug interaction, a test for a specific gene or allele is not reasonable and 
necessary unless and until a clinician is considering using a drug that has an interaction with a specific gene or 
allele. Once this initial decision has been made it may be reasonable and necessary to test for that allele or that 
gene. If a clinician is not considering using a medication with an interaction with a gene being tested, or if the 
patient who is being tested is unable or unwilling to use a medication interacting with the gene or allele being 
tested, then there is no benefit to the patient to run a test of that gene or allele. 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.