MolDX Pharmacogenomics LCD L38335: What Labs Must Document to Get Paid
Short answer: Under MolDX LCD L38335, Medicare covers pharmacogenomic testing only as an adjunct after a clinician has narrowed treatment to specific drugs with an actionable gene-drug interaction per FDA labeling or CPIC Level A or B. A diagnosis alone does not justify the test, and the record must show which drugs were considered.
Pharmacogenomic (PGx) testing is one of the most denial-prone categories a molecular lab bills, because medical necessity depends on what the ordering clinician was thinking, not just on the test. This article walks through what the MolDX Pharmacogenomics Testing LCD (L38335) and its billing article (A57384) actually require, so lab operations, medical directors, and RCM teams can build requisition and claim workflows that hold up on review. It is policy analysis for laboratory decision support, not coverage advice for any individual claim.
Which policy applies and what changed recently
L38335 is administered by Noridian Healthcare Solutions for jurisdictions J-E and J-F, covering California, Nevada, Alaska, Idaho, Oregon, Washington, Arizona, Montana, North Dakota, South Dakota, Utah, Wyoming, Hawaii, Guam, American Samoa, and the Northern Mariana Islands. The original effective date is August 17, 2020. According to the CMS Medicare Coverage Database, the current revision (R5, effective March 5, 2026) consolidated the JE and JF documents into a single policy and is labeled non-substantive. Earlier revisions added regulatory citations (R1, August 24, 2023), revised analysis paragraphs (R2, July 3, 2025), and updated formatting and citations (R3, October 2, 2025).
The practical reading: the coverage logic you built around this LCD has been stable. The operational rules sit in the billing and coding article, A57384, which reached revision R21 effective July 1, 2026. That revision deleted code 0029U and revised the description of 0034U. Labs that map PLA codes to test menus should reconcile their charge masters against it.
The core coverage rule: a drug must already be on the table
The LCD treats PGx testing as reasonable and necessary only as an adjunct once the clinician has narrowed treatment to specific medications under consideration or already in use. Two conditions anchor the indication. First, the drug must have a gene-drug interaction that is clinically actionable according to FDA labeling or CPIC Level A or B. Second, the drug selection must come from clinical factors, not from the PGx test itself.
The policy states that PGx testing is not considered reasonable and necessary merely because a patient has a particular diagnosis, and it is not covered when the treating clinician is not considering treatment with a medication. Genes not identified as having actionable use are also not considered reasonable and necessary. Anticoagulation dosing is outside this LCD and falls under NCD 90.1 for warfarin.
For labs, this translates into a requisition design problem. A test order that lists only a diagnosis and a panel name gives a reviewer nothing to work with. For background on how CPIC evidence levels are assigned, see our CPIC pharmacogenomics guide.
Single genes, panels, and combinatorial tests
The LCD covers single-gene tests, multi-gene panels, and combinatorial tests, but with different rules for each. A multi-gene panel is covered if more than one gene on it is reasonable and necessary, or if multiple drugs with different relevant genes are under consideration. A panel is not reasonable and necessary if only a single gene on it meets that standard. If two or more single genes are ordered separately, each must be reasonable and necessary when ordered, and the record must show each was ordered individually.
Combinatorial tests face the tightest limit. The LCD states there are insufficient data to support coverage for any combinatorial test, and proprietary algorithm components are not considered reasonable and necessary, although individual components with demonstrated utility may be covered. Labs offering algorithm-scored neuropsychiatric panels should expect scrutiny on exactly this point.
What the medical record must contain
The LCD lists specific documentation elements. The record should show that the patient has a diagnosis for which drug therapy is reasonable and necessary, and that the drugs considered are reasonable and necessary for that diagnosis. It should show an initial personalized decision by the clinician that accounts for the patient's conditions, other medications, history, and preferences. It should identify which drugs were considered and for which indications. The ordering provider must be licensed and qualified to both diagnose the condition and prescribe medications.
On the laboratory side, the report itself carries requirements: it must state the clinical significance of the genotype and document the specific genotype-drug interaction. When a reference allele is tested for exclusion, the report must identify it as such. A report that returns raw genotypes without interpretation is a documentation gap the lab controls directly.
Claim submission rules in Article A57384
The billing article is where many clean-looking claims fail. Per A57384, select the appropriate CPT or PLA code and enter one unit of service. Enter the DEX Z-Code identifier next to the CPT code in the comment or narrative field, in the location that matches the claim type. For Part B drugs under consideration, loop 2400 has an 80-character limit: list required drug names first, separate multiple drugs with a slash, avoid duplicates, and use generic names where possible. Our DEX Z-Code claims guide covers the broader mechanics.
Only one test may be performed per date of service, whether a single-gene test or a multigene panel, and it should be the test most likely to identify the needed alleles or variants. Medical necessity for additional testing and the related clinical decisions must be documented in the medical record. The article lists 44 ICD-10-CM codes under its medical-necessity group, covering conditions such as schizophrenia, bipolar disorder, major depressive disorder, anxiety and PTSD, and ADHD, and it notes that multigene panels with a specific intended use, such as depression or neuropsychiatric indications, must include the relevant ICD-10 codes. The code list is for reference, and the clinical rule above still governs. See also our guide to ICD-10 codes for genetic testing.
A practical pre-bill checklist for labs
Labs can reduce exposure by gating claims on five questions before release: whether the requisition names at least one drug under consideration; whether each tested gene maps to an FDA-labeled or CPIC Level A or B gene-drug pair; whether panel genes beyond a single gene are justified by multiple drugs or genes; whether only one test is billed for the date of service; and whether the Z-Code and drug list are in the correct claim field. Pair this with the denial-prevention approach in our genetic testing denials guide and the payer-specific context in Medicare coverage for genetic testing. Visit the ScreenMyGene homepage to see how structured ordering data supports this kind of pre-bill check.
Frequently asked questions
Does a depression diagnosis alone support PGx coverage?
No. L38335 says PGx testing is not reasonable and necessary merely because a patient has a particular diagnosis. The clinician must be considering specific medications, and the record should show which drugs and for what indication.
Can we bill a panel when only one gene is actionable?
Generally no. The LCD says a multi-gene panel is not reasonable and necessary if only a single gene on it is. A panel is supported when more than one gene is necessary or when multiple drugs with different relevant genes are under consideration.
How many PGx tests can be billed per date of service?
Article A57384 allows only one test per date of service, whether a single-gene test or a multigene panel. It should be the test most likely to identify the needed alleles or variants, with any additional testing justified in the record.
Are combinatorial or algorithm-scored PGx tests covered?
The LCD states insufficient data support coverage for any combinatorial test and that proprietary algorithm components are not reasonable and necessary. Individual components with demonstrated utility may still be covered, so labs should be able to bill and document them separately.
Where does the DEX Z-Code go on the claim?
It goes in the comment or narrative field next to the CPT code: loop 2400 or SV101-7 on electronic Part B claims, Item 19 on paper Part B, SV202-7 on electronic Part A, and Block 80 on UB-04 paper claims.
Educational disclaimer: This article is provided for general educational and informational purposes for laboratory and healthcare professionals. It is not legal, coding, reimbursement, or medical advice. Coverage policies change; verify current requirements with your Medicare Administrative Contractor and the CMS Medicare Coverage Database before billing.
Sources: CMS Medicare Coverage Database, LCD L38335 (MolDX: Pharmacogenomics Testing); CMS Medicare Coverage Database, Billing and Coding Article A57384.