Molecular Diagnostic Tests and Medicare

Published 06/23/2023

Medicare is a defined benefit program. For a service to be considered for Medicare coverage, an item or service must fall within a statutory benefit category. Although the Medicare Benefit Policy Manual IOM 100-2, Ch. 15, Sec 10 identifies “Diagnostic X-Ray tests, laboratory tests and other diagnostic tests” as a benefit category, Sec. 1862(a)(1)(A) of the Social Security Act further refines the benefit category for these eligible items and services and requires that they be “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” See 42 U.S.C. § 1395y(a)(1)(A). For all items and services eligible for Medicare coverage, both above statements must be applied.

To be paid under this benefit category, a diagnostic test must be ordered by a physician who is part of the beneficiary’s treating care team, and the results must be used in the management of the beneficiary’s specific medical problem. Although molecular diagnostic tests may provide valid and useful information, not all molecular diagnostic tests meet this definition.

Does the test fall within a Medicare benefit category?

Based on the Medicare Benefit requirements, the following test types are examples of services that may not be considered a benefit (statutory excluded) and therefore would be denied as Medicare Excluded tests:

  • Tests considered screening in the absence of clinical signs and symptoms of disease that are not specifically identified by the law
  • Tests that confirm a diagnosis or known information
  • Tests that determine risk for developing disease or condition
  • Tests performed to measure the quality of a process
  • Tests without specific indications
  • Tests identified as investigational by available literature and/or the literature supplied by the developer, and are not part of a clinical trial
  • Tests typically performed on patients younger than 65 years of age and outside the Medicare population
    • Tests performed on patients receiving Medicare benefits younger than 65 years will be reviewed on a case-by-case basis.

Is the Test Reasonable and Necessary?

MolDX starts this process by determining the clinical value/utility of the test – i.e., does the test provide the clinician with actionable data that will improve patient outcomes and/or change physician care and treatment of the patient that results in improved patient outcomes. During the determination the following questions about the test are examined:

  • Who should be tested and under what conditions?
  • What does the test tell us that we do not know?
  • Can we act on the information provided by the test?
  • Will we act on the information provided by the test?
  • Do/Will the results change the outcome?

Test Assessment Outcome

MolDX reviews DEX Z-Code® test applications and technical assessments (TA) to confirm each test meets Medicare’s reasonable and necessary criteria. The scope of the MolDX program is outlined in the Molecular Diagnostic Test policy LCD - MolDX: Molecular Diagnostic Tests (MDT) (L35025) ( Local Coverage Determinations (LCDs) defining coverage criteria for specific molecular diagnostic services can be found MCD Search ( and guidance for billing and facilitation of reimbursement can be found in National Coverage Determinations (NCDs), or LCDs and accompanying Billing and Coding Articles.

Based on the technical assessment, the MolDX program will address test coverage through one of the following methods:

  • Covered without limitations beyond those inherent in its design and purpose
  • Limited coverage (i.e. for specific DX, clinical indications)
  • Non-covered determination because the test was not found to be medically reasonable and necessary for the diagnosis and/or treatment of the patient