Industry experts say CMS took an important step to cover diagnostic laboratory tests using Next Generation Sequencing (NGS) for patients with advanced cancer, yet they disagree about whether insurers will follow that lead.

CMS made the move after the FDA’s approval of the FoundationOne CDx (F1CDx) test, which CMS describes as the first “NGS-based in vitro diagnostic test that is a companion diagnostic for 15 targeted therapies.” The test can detect genetic mutations in 324 genes and two genomic signatures in any solid tumor.

NGS tests have been used in cancer care for “quite a while,” says Lon Castle, M.D., chief medical officer of lab and specialty drug management at eviCore healthcare. But the expanded use of NGS to look for specific markers for different cancers is new.

CMS’s coverage decision sends a signal to both the developers of DNA sequencing technology and private payers. “Some [payers] may pause or put a little bit more restrictive conditions on it, but it’s hard to believe that a commercial payer would outright not cover it going forward,” according to Jayson Slotnik at Health Policy Strategies, LLC.

He points out that adding DNA test to the coverage can help private payers recruit members. Besides, in theory the tests would help better diagnose and treat cancer patients, thus producing better outcomes.

Yet Slotnik also sees potential drawbacks, as genetic tests can simply be an additive cost to health plans.

Castle says private insurers are likely to take a cautious approach to their decision about whether to follow CMS’s lead, given that most of them already cover gene-sequencing panels for specific types of cancers. The insurers may find those the most cost-effective for the time being, rather than the F1CDx panel.