Memorandum in Opposition

For Immediate Release: May 15, 2023

Re:      A.1673 (Hunter)/S.1196 (Persaud) – An act to amend the insurance law and the social services law, in relation to requiring health insurance policies and Medicaid to cover biomarker testing for certain purposes

This legislation, A.1673/S.1196, would mandate coverage of biomarker testing intended to diagnose, treat, manage, and monitor patient care.  Health plans recognize the importance of precision medicine and provide coverage for biomarker testing.  However, the bill sets an overly broad set of criteria in which coverage would be required that would result in a large number of biomarker testing that may not be supported by best practices or align with clinical criteria.  As a result, the New York Health Plan Association (HPA) opposes the legislation.

While A.1673/S.1196 is well intentioned, the bill has the potential to expose patients to tests for which the risks and benefits are unknown and have not been proven to provide clinical benefits.  The focus should be based on nationally recognized clinical guidelines and peer reviewed literature.

Specifically, the bill would mandate coverage for any test “approved or cleared by the Food and Drug Administration (FDA) or indicated tests for an FDA approved drug.” The role of the FDA related to biomarkers is to regulate medical devices to ensure the health and safety of patients, which translates to the quality, reliability and clinical validity of a device for biomarker testing.  Its role does not include ensuring clinical utility or making recommendations for how healthcare providers should or should not utilize a biomarker test.  FDA clearance or approval alone is insufficient to demonstrate clinical utility of a biomarker.  This does not mean that all biomarkers on the device have clinical utility, should be used in clinical testing, or reported by a lab using the device.  Using FDA approved or cleared as a sole criteria runs the risk of over testing and potential harm.

Additionally, A.1673/S.1196 would require coverage if covered by the Centers for Medicare and Medicaid Services (CMS) or Medicare Administrative Contractor (MAC) Local Coverage Determinations.  Local MACs have less rigorous evaluative capabilities and biomarker testing coverage requirements should meet a high evidence threshold to ensure tests are delivering clinical value.

Further, the bill mandates coverage if there are nationally recognized clinical practice guidelines and consensus statements. The use of consensus statements is less rigorous than nationally recognized clinical practice guidelines.  Authoritative clinical practice guidelines rely on systematic reviews that assess the available scientific studies in a proscribed fashion to minimize bias, permitting conclusions as to whether a technology can lead to appropriate provision of medical care.  However, consensus guidelines are opinion and are not informed by systematic reviews or reference to scientific studies in national peer-reviewed journals.

Managed care plans are founded on principles that emphasize primary and preventive care and continually evaluate and update their care delivery protocols to follow best practices and evidence-based medical information. Mandating into statute specific treatments or levels of coverage fails to take into account when the science changes or guidelines evolve, requiring health plans to cover services that are outdated and, potentially, harmful to patients.

Further, creating new health insurance coverage mandates results in increased costs for individuals and employers purchasing health insurance in New York.  Mandating coverage of specific services disproportionately affect small and medium-sized employers.  Forcing employers to include benefits they and their workforce may not want or need exacerbates the challenge they face to find affordable health care options.  Mandated benefit bills pertain only to fully-insured policies, which are generally those purchased either by individuals who buy coverage on their own or receive it through a small or medium-sized business.  Large companies typically “self-insure,” providing employee health benefits by directly paying health care claims to providers, which are governed by the Federal Employee Retirement Income Security Act (ERISA) and therefore not subject to state mandated benefits.  This exemption offers self-insured employers greater control over the particular benefits they cover for their employees.

One reason large employers typically self-insure is to avoid covering certain mandated benefits. Today, more than 50 percent of the commercial market in New York is covered under a self-insured plan. As more employers self-insure, state laws mandating specific types of benefits and services affect an increasingly smaller portion of the privately insured marketplace and fall largely on small and medium-sized employers.

For all these reasons, HPA OPPOSES A.1673/S.1196.