For some recent client research, I had cause to go back to a 2008 Medicare LCD for BRCA testing and other germline testing.
The LCD is here.
The LCD requires Ashkenazi patients to be first screened for the 3 founder mutations, then if they are negative, reflex to sequence testing:
This actually loses money for Medicare. It doesn't save money.
Using current codes, under direct BRCA sequencing, for 100 patients you'd pay 100 x $2027 (code 81162), or $202,700.
Under the recommended screening test, you pay more. You'd pay for 100 patients at 100 x $440 (code 81212), and 5 would be positive. The other 95 now progress to BRCA sequencing, 95 x $2027 (code 81162), or $192,565. Adding together, this pathway costs $236,565.
It's cheaper to move to direct sequencing than to hotspot mutations followed by sequencing, when the hit rate is so low (1-5%) as here.
I've seen this in more recent BRCA policies but I haven't made a systematic study of it. A lab would have no reason to point out the anomaly to the policymaker. You just have to count on the policymaker being unable to do fourth-grade math.