Avalon Announces Better Way for Health Insurance Plans to Manage Growth and Costs of Genetic Testing

Next Generation Solution Gives Health Plans Greater Insight and Control into Genetic Lab Test Spending

TAMPA, Fla., December 12, 2023 – Avalon Healthcare Solutions, the world’s first Lab Insights company, today announced its next-generation product that gives health insurance plans unprecedented control over rapidly expanding genetic lab testing.

Precision Genetic Testing Management (PGTM) is the next evolution of Avalon’s genetic test management solution combining the lab testing expertise of Avalon with accurate claims data to produce a first-of-its-kind solution to manage genetic testing.

PGTM improves upon Avalon’s existing genetic lab benefit management offering by leveraging DEX Z-Codes®, Palmetto GBA’s proprietary 5-character, alpha-numeric codes assigned within the DEX® Diagnostics Exchange. Z-Code® identification links CPT codes, tests, and labs to ensure the tests and their associated test quality, utility, and validity are transparent to health plans. This allows for automated policy enforcement and payment decisions at the discrete test level while restricting unbundling and code stacking. Z-Codes have been required for Medicare Fee for Service across four Medicare Administration Contractors for many years. Z-Codes are now emerging as the industry-leading standard being used by health plans beyond Medicare for commercial lines of business.

Avalon will expand existing test evaluation and identification standards used by CMS into evidence-led genetic test management for all healthcare payer markets.

The use of genetic testing has boomed in recent years, opening a doorway to a new age of precise and personalized medicine. However, the growth in the number and complexity of tests has outpaced health plans’ ability to manage them and ensure the most benefit for patients, payers, and providers.

Consider: There are roughly 175,000 genetic tests available with 10 new tests hitting the market each day. There are only ~500 CPT codes available to identify all of those tests. This results in gaps in provider awareness and expertise; variations in coding, coverage, and reimbursement practices; a lack of rigorous clinical evidence and regulation; and wide variability in the quality and utility of precision tests along with the lack of genetic test specificity.

“It’s clear that the legacy systems are insufficient to handle genetic testing. There are too many tests, too few codes, and not enough evidence about how to best manage genetic testing to the benefit of all involved,” said Jason Bush, PH.D., executive vice president of product, Avalon. “PGTM gives payers the tools they need to control test spend while making sure patients receive the appropriate tests.”

PGTM helps health plans manage genetic testing spend across lines of business with minimal abrasion by using evidence-based guidelines. It rests on five pillars:

  1. Policy development: Avalon has proprietary, evidence-based policies for genetic labs validated by an independent Clinical Advisory Board, plus an exclusive partnership to expand on Palmetto GBA’s MoIDX used by CMS.
  2. Test identification and quality: A framework to classify a discrete test based on manufacturer’s claims using industry-standard DEX Z-Codes to ensure the right test is provided.
  3. Utilization management: NCQA-accredited utilization management and prior authorization, as well as automated provider decisioning, and clinical reviews based on health plan policies.
  4. Payment accuracy: Automated claim coding rules to enforce health plan policy adherence and validate authorization decisions during claim adjudication.
  5. Genetic network management: A curated network of genetic labs that supplements a health plan’s preexisting routine lab network with vetted providers and pre-negotiated pricing.

“Genetic testing is a promising and powerful tool that requires a new system for payers to manage it,” said Avalon CEO Bill Kerr, MD. “We’re proud to deliver this new method of testing management to help realize genetic testing’s full potential and help improve the health of patients.”

PGTM offers payers the following benefits:

  1. Minimized abrasion of plans, providers, and members by automating, or for select procedures removing requirement for, prior authorization through the use of Z-Codes, evidence-based lab policies, and a preferred lab provider program.
  2. Reduced fraud, waste, and abuse, which reduces expenditures.
  3. Increased savings and a reduced administrative burden. Avalon estimates savings of $0.50 to $0.65 per member per month with an additional ~10% savings on overall genetic test unit costs leveraging Avalon’s contracted preferred network and negotiated fee schedule.

Genetic testing is evolving at a rapid rate. The tools to manage it must do the same. To learn more about PGTM, go here.

About Avalon Healthcare Solutions

Avalon Healthcare Solutions is the world’s first and only Lab Insights company, bringing together our proven Lab Benefit Management solutions, lab science expertise, digitized lab values, and proprietary analytics to help healthcare insurers proactively inform appropriate care, reduce costs, and improve clinical outcomes. Working with health plans across the country, the company covers more than 38+ million lives and delivers 9-20% outpatient lab benefit savings. Avalon is pioneering a new era of value-driven care with its Lab Insights Program that captures, digitizes, and analyzes lab results in real-time to provide actionable insights for earlier disease detection, ensuring appropriate treatment protocols, and driving down overall costs. For more information about Avalon, visit www.avalonhcs.com.

Media Contacts:

Michele Norton MS, RN
SVP Product Marketing, Avalon Healthcare Solutions

Janet Mordecai
Amendola Communications for Avalon Healthcare Solutions

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