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Blog | Operations Management

How Providers and Insurers can Collaborate to Manage the Cost of Genetic Testing

Blog | Operations Management

How Providers and Insurers can Collaborate to Manage the Cost of Genetic Testing

The cost of genetic testing and therapy, often a deterrent to a potentially beneficial treatment, can be made more manageable if providers and insurers work together.

Thirteen-year-old Jack Hogan suffers from an inherited vision disorder that makes it impossible for him to play baseball, pick up toys from the floor, or sit with his friends outside at night. Without a cure, he would become legally blind by his 20s.

But this past March, Jack became the first person in the country to be treated with Luxturna, a gene therapy for people suffering from a rare, inherited retinal disease that can lead to blindness. This disorder is caused by mutations in the RPE65 gene. With just three drops of liquid injected underneath the retina, Jack received a synthetic copy of the gene in his left eye. A week later, the procedure was performed in his right eye.

It’s too early to tell whether Luxturna will restore Jack’s vision completely, but the pilot results are promising: 27 of 29 patients who were treated with Luxturna during a clinical trial experienced significant vision improvement within a year.

There is a catch, however. Luxturna costs $425,000 per eye, for a total of $850,000, prompting debate regarding costs surrounding access to genetic testing and therapies.

The Price of Genetic Innovation

Although some companies offer outcomes-based rebates for patients who don’t fully respond to therapy, many who qualify for treatments will not be able to afford it, even if their insurance company covers a portion of the cost.

The price tag associated with genetic innovation is one reason why health plans require prior authorization for genetic testing and therapies.

Most physicians don’t have formal training in genetics, and genetic testing products often are released before evidence-based guidelines that help to inform their use are available. This heightens the risk that physicians not only will order genetic tests and therapies incorrectly, but also will be unable to interpret the test results correctly—especially when the differences between results may be minute.

However, prior authorization alone is not enough to ensure the right test or therapy is ordered at the right time, for the right patient. Managing the costs associated with genetic therapies and tests requires partnership between insurers and providers to support informed decision-making. It also necessitates close collaboration with genetics experts to separate the novelty of new therapies from those that are proven to work in specific circumstances.

Steps Toward a Value-Based Approach

There are three ways insurers and providers can work together to advance a value-based approach to genetic testing and therapy.

Develop a framework for informed decision-making support. Just because a test exists doesn’t mean we fully understand the best ways to apply it. Health plans should consider supplementing their prior authorization team with genetics experts who can ensure patients are screened and educated on specific therapies, such as Luxturna in Jack’s case. These genetics experts can explain the science behind determinations and, where applicable, recommend alternative approaches. On the provider side, access to genetic counselors can help physicians navigate the complexities of genetic testing decisions at the point of care. Genetic counselors also can assist in navigating sensitive conversations with patients.

Go beyond “yes” or “no” answers to prior authorization requests. With 70,000 genetic testing products on the market and new genetic tests being released at a rate of 10 per day, most physicians cannot possibly have the subject matter expertise necessary to not only determine whether genetic testing is needed, but also which test to order. By viewing the prior authorization process as an opportunity for provider education, insurers can help physicians make genetic testing determinations more efficiently. For instance, RPE65 gene mutations makes up less than 1 percent of all inherited retinal diseases. However, with the right genetic counseling and testing, patients can be evaluated, tested, and counseled about the right therapies for their specific disease. 

Support access to clinical trials. Insurers and providers can help build evidence for more effective genetic treatments by exploring ways to expand enrollment in clinical trials. This approach ultimately will provide the evidence needed to support even more advancements in genetic testing and personalized treatment.

The Right Care for the Right Circumstance

The costs associated with some genetic therapies are high, but for many patients, such therapies are life changing. By collaborating around genetic testing decisions, health plans and providers can ensure their efforts are highly informed and highly coordinated.


David Nixon is chairman and CEO, InformedDNA, St. Petersburg, Fla. 

About the Author

David Nixon

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