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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 state 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.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. 
 
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. 
 
You can find this information 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.