Are FDA-approved companion diagnostics automatically covered by Medicare?

Not unconditionally. Under NCD 90.2, an NGS test that is FDA-approved or cleared as a companion in vitro diagnostic, used for an FDA-approved or cleared indication that matches the patient's cancer, with results provided to the treating physician for management, has a defined national coverage pathway, but the patient must still meet the NCD's clinical criteria. CMS described tests that gain FDA companion-diagnostic approval or clearance as receiving full coverage under the NCD provided the other coverage criteria are also met. So it is predictable and national, but still conditional, never an automatic, criteria-free guarantee.

What does 'on-label indication' mean for coverage?

It means the companion diagnostic is being used for the specific cancer type and biomarker that the FDA approved or cleared it for. NCD 90.2's companion-diagnostic pathway requires an FDA-approved or cleared indication for use in that patient's cancer. If a test is run for a cancer type or purpose outside its FDA-cleared indication, that off-label use does not travel through the national companion-diagnostic pathway and instead depends on Medicare Administrative Contractor discretion.

What happens to NGS tests that are not FDA companion diagnostics?

NCD 90.2 leaves coverage of NGS tests that are not FDA-approved or cleared companion diagnostics to the Medicare Administrative Contractors (MACs) when the same clinical criteria are met. In much of the country this is administered through the MolDX program. Coverage for these tests can vary by contractor and jurisdiction, which is exactly why companion-diagnostic, on-label status is the more predictable route.

Does companion-diagnostic coverage apply to early-stage cancer?

Generally no. NCD 90.2's somatic pathway, including the companion-diagnostic route, is built around patients with recurrent, relapsed, refractory, metastatic, or advanced stage III or IV cancer. A 2020 amendment added a national pathway for certain germline testing. Early-stage somatic NGS testing outside those bounds typically falls to contractor discretion rather than the national pathway.

Why an FDA Companion Diagnostic Is the Cleanest Path to Medicare Coverage for an NGS Test

A molecular lab can run two technically identical next-generation sequencing panels on two Medicare patients and watch one claim sail through while the other lands in an appeals queue. The difference often is not the science in the assay. It is whether the test carries FDA companion-diagnostic standing and is being used for the cancer the FDA cleared it for. That single distinction is the most reliable lever a lab or oncology practice has over Medicare coverage of an NGS test, and it is worth understanding precisely why.

Disclaimer: This article is educational and is not medical, legal, or billing advice, nor a coverage determination for any specific patient, test, or claim. Coverage rules change, Medicare Administrative Contractors apply their own local policies, and the only authoritative sources are the current NCD and applicable LCD language. Verify against CMS's current policy and consult qualified clinical, billing, and compliance professionals before making coverage, billing, or treatment decisions. Use this information at your own risk.

What a companion diagnostic actually is

A companion diagnostic, or CDx, is a test the FDA reviews and authorizes alongside a specific therapy. The FDA's own definition is narrow and deliberate: a companion diagnostic is an in vitro diagnostic device or imaging tool that provides information that is essential for the safe and effective use of a corresponding therapeutic product (FDA). In oncology this usually means identifying patients whose tumors carry a particular biomarker, an EGFR mutation, a BRAF V600E alteration, microsatellite instability, so a clinician can match them to a drug that works for that biomarker.

The key point is that a companion diagnostic is not just a good test. It is a test the FDA has formally tied to a drug and an indication. The FDA maintains a public, regularly updated list of cleared or approved companion diagnostic devices, which is the authoritative place to confirm whether a given assay holds CDx status and for which therapies and tumor types (FDA). That regulatory anchoring is precisely what Medicare's coverage framework leans on.

The rule that ties CDx status to coverage: NCD 90.2

Medicare's national coverage rule for cancer NGS is National Coverage Determination 90.2, first finalized in March 2018 and later amended (CMS NCD 90.2; CMS press release). The rule is often summarized as "Medicare covers NGS for advanced cancer," but that summary hides the structure that matters most. NCD 90.2 does two different jobs at once. For some tests it establishes a national coverage pathway. For others it hands the decision to local Medicare Administrative Contractors. Companion-diagnostic status is what determines which door a test comes through.

The companion-diagnostic door is the cleaner one. Under NCD 90.2, an NGS diagnostic laboratory test has a defined national coverage pathway when it meets a specific set of conditions (CMS NCD 90.2 Decision Memo):

The test is performed in a CLIA-certified laboratory and is ordered by the treating physician.
The patient has recurrent, relapsed, refractory, metastatic, or advanced (stage III or IV) cancer, has not been previously tested with the same NGS test for the same primary cancer diagnosis, and has decided to seek further cancer treatment.
The test has FDA approval or clearance as a companion in vitro diagnostic.
The test has an FDA-approved or cleared indication for use in that patient's cancer (this is the on-label requirement).
Results are provided to the treating physician for management of the patient, using a report template to specify treatment options.

When all of those hold, you are inside the national pathway. CMS put the consequence plainly: tests that gain FDA approval or clearance as an in vitro companion diagnostic receive full coverage under the final NCD, provided the other coverage criteria are also met (CMS press release). That is as close to a predictable national "yes" as Medicare offers for an NGS assay, and it is the throughline of this whole discussion.

Why "on-label" is the load-bearing word

Read the criteria again and notice that FDA companion-diagnostic status alone is not enough. The rule requires an FDA-approved or cleared indication for use in that patient's cancer. That is the on-label requirement, and it is the part labs most often gloss over.

Many modern NGS panels are approved as companion diagnostics for several drug-and-tumor combinations at once while also reporting a much wider set of genomic findings. FoundationOne CDx, for example, received FDA approval on November 30, 2017 as the first NGS-based companion diagnostic to incorporate multiple companion-diagnostic indications across solid tumors (FDA, FoundationOne CDx P170019; NCI). Guardant360 CDx, a liquid-biopsy panel, was FDA-approved in 2020 (Guardant Health investor relations). Both keep adding companion-diagnostic indications over time as new drug approvals arrive.

The CDx label is therefore specific, not blanket. Running an FDA-approved companion diagnostic for a tumor type or purpose that falls outside its cleared indications is, for coverage purposes, an off-label use, and off-label use does not ride the national companion-diagnostic pathway. The same physical test can be on-label for one patient and off-label for the next. Coverage predictability lives in that match between the patient's cancer and the test's cleared indication, as of the date of service, which is why any specific claim should be checked against current FDA labeling and current NCD and LCD policy rather than assumed.

The other door: contractor discretion

So what happens to NGS tests that are not FDA-approved or cleared companion diagnostics, or that are used off-label? NCD 90.2 does not cover them nationally. It leaves coverage to the Medicare Administrative Contractors when the same clinical criteria are met (CMS NCD 90.2). In much of the country that determination runs through the MolDX program, administered by contractors including Palmetto GBA, Noridian, CGS, and Wisconsin Physicians Service (Precision Medicine Online).

MolDX maintains its own billing and coding articles distinguishing targeted panels from comprehensive genomic profiling, with CGP expected to yield clinically relevant information beyond a targeted panel, such as identifying clinical trials or possible therapeutic interventions for off-label use (CMS, MolDX article A56518). This is meaningful coverage, but it is local coverage. It can differ by contractor and jurisdiction, it can change, and it requires meeting contractor-specific criteria. As one industry analysis put it, the national rule covers FDA-approved companion diagnostics but leaves laboratory-developed NGS tests without FDA approval to the MACs, so coverage for those tests continues to vary by jurisdiction (Precision Medicine Online).

That variability is the whole reason CDx, on-label status is the cleaner lever. One door is a defined national pathway. The other is a shifting patchwork.

A quick way to triage a test

When you are trying to predict how a Medicare NGS claim will be treated, the same handful of questions sort most cases:

Is the test FDA-approved or cleared as a companion in vitro diagnostic? Confirm on the FDA's public CDx list, not on marketing copy.
Is the patient's cancer within the test's FDA-cleared indication on the date of service? This is the on-label check, and it is per patient, per indication.
Does the patient meet the NCD's clinical gate? Advanced or metastatic disease, treating-physician order, CLIA lab, no duplicate prior NGS for the same diagnosis, seeking further treatment.
Are results returned to the treating physician to guide management?

If the answer to all four is yes, you are in the national companion-diagnostic pathway, the most predictable position available. If any answer is no, you are likely in contractor-discretion territory, where the analysis is real but local and variable.

The limits worth stating plainly

The companion-diagnostic pathway is the cleanest route, not a universal one, and it is worth being honest about where it stops.

It is conditional, not automatic. Even an on-label companion diagnostic still has to clear the clinical criteria; CMS's language is full coverage provided the other coverage criteria are also met (CMS press release). It is bounded by stage. The somatic pathway is built around advanced and metastatic disease, so it does not by itself reach most early-stage testing. Germline testing follows its own track: a 2020 amendment added a national pathway for certain inherited-cancer testing, effective for dates of service on and after January 27, 2020, again subject to defined criteria (CMS NCD 90.2). And coverage in principle is still not a paid claim: documentation that the criteria were met, accurate coding, and avoidance of duplicate testing all decide whether an otherwise-covered test is actually reimbursed. Report CPT and PLA codes by number and confirm the current descriptor and any contractor billing rules rather than relying on memory.

None of this is static. Companion-diagnostic indications expand as new drugs are approved, FDA labeling changes, and contractor policies are revised. A test that is on-label and covered for an indication today may have a broader, or differently defined, footprint next quarter. Treat every specific determination as a point-in-time answer to verify, never a permanent one.

Where this leaves a lab or practice

The strategic takeaway is simple to state and easy to underweight. The most reliable thing you can do to make an NGS test's Medicare coverage predictable is to keep it inside the FDA companion-diagnostic, on-label lane, because that lane is governed by a defined national pathway. Everything outside it, off-label use of a CDx, non-CDx panels, comprehensive genomic profiling for trial-matching or off-label drug exploration, lives in a patchwork of local and commercial policy that shifts by contractor, by indication, and over time.

That per-test, per-indication coverage logic is exactly what is hard to track by hand and exactly what Converus is built to monitor, so labs and revenue-cycle teams can see which uses sit on the clean national pathway and which depend on local discretion before the claim goes out. The article you are reading is a starting point, not a determination; confirm the current FDA labeling and the current NCD and LCD policy for any specific test and patient.