Local Coverage Determination (LCD)

Thyroid Nodule Molecular Testing


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Thyroid Nodule Molecular Testing
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For services performed on or after 12/01/2021
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Issue Description
Issue - Explanation of Change Between Proposed LCD and Final LCD

CMS National Coverage Policy

Language quoted from Centers for Medicare and Medicaid Services (CMS), National Coverage Determinations (NCDs) and coverage provisions in interpretive manuals is italicized throughout the policy. NCDs and coverage provisions in interpretive manuals are not subject to the Local Coverage Determination (LCD) Review Process (42 CFR 405.860[b] and 42 CFR 426 [Subpart D]). In addition, an administrative law judge may not review an NCD. See Section 1869(f)(1)(A)(i) of the Social Security Act.

Unless otherwise specified, italicized text represents quotation from one or more of the following CMS sources:

Title XVIII of the Social Security Act (SSA):
Section 1862(a)(1)(A) excludes expenses incurred for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.
Section 1833(e) prohibits Medicare payment for any claim which lacks the necessary information to process the claim.
Section 1862(a)(7) excludes routine physical examinations, unless otherwise covered by statute.

CMS Publications:
CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 80.1 – Laboratory services must meet applicable requirements of CLIA

CMS Publication 100-04, Medicare Claims Processing Manual, Chapter 16, Section 40.7 Billing for Noncovered

Clinical Laboratory Tests Section and 120.1 Clarification of the Use of the Term “Screening” or “Screen”

CMS Publication 100-04, Medicare Claims Processing Manual, Chapter 30, Section 50 Advance Beneficiary Notice of Noncoverage (ABN)

CMS Publication 100-08, Medicare Program Integrity Manual, Chapter 13, Local Coverage Determinations

CMS National Correct Coding Initiative (NCCI) Policy Manual for Medicare Services, Chapter 10, Pathology/Laboratory Services, (A) Introduction

CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 80.6. 5 which describes the Surgical/Cytopathology Exception.

CMS National Correct Coding Initiative (NCCI) Policy Manual for Medicare Services, Chapter 10 Pathology/Laboratory Services which addresses reflex testing.

CMS Publication 100-03, Medicare National Coverage Determinations (NCD) Manual, Chapter 1, Part 3, Section 190.3 Cytogenetic Studies.

Code of Federal Regulations:
42 CFR, Section 410.32, indicates that diagnostic tests may only be ordered by the treating physician (or other treating practitioner acting within the scope of his or her license and Medicare requirements) who furnishes a consultation or treats a beneficiary for a specific medical problem and who uses the results in the management of the beneficiary's specific medical problem. Tests not ordered by the physician (or other qualified non-physician provider) who is treating the beneficiary are not reasonable and necessary (see Sec. 411.15(k)(1) of this chapter).


Coverage Guidance

Coverage Indications, Limitations, and/or Medical Necessity

Indications and Limitations of Coverage

The use of molecular testing (MT)* to assess thyroid nodules may be considered medically necessary ONCE per nodule workup when ALL of the following criteria are met:

  1. Thyroid fine-needle aspiration (s) (FNA) performed secondary to established indications based on ultrasound characteristics, size and clinical findings (1)
  2. Presence of indeterminate thyroid FNA cytopathology described as (1,2)
    1. Atypia of undetermined significance (AUS) or follicular lesion of undetermined significance (FLUS) (i.e., Bethesda category III), or
    2. Follicular neoplasm (FN) or suspicious for a follicular neoplasm (SFN) (i.e., Bethesda category IV)
  3. The need for thyroidectomy is unclear after consideration of clinical, imaging, and cytologic features (1,2)
  4. Local institutional malignancy rates are known and used for optimal extrapolation of results to thyroid cancer risk (1)
  5. Informed patient willing to potentially undertake surveillance (1)

*The scope of this LCD is limited to tests submitted on claims to NGS jurisdictions J6 and JK.

Summary of Evidence

Thyroid cancer is the most common endocrine malignancy, with over fifty thousand new United States diagnoses in 2020 (3). Thyroid nodules are exceedingly common with prevalence rates of up to 68%, with higher frequencies in the elderly (4). While the majority (85-93%) of thyroid nodules are benign, diagnostic testing (history and physical, laryngoscopy, hormone and chemistry analysis, ultrasound, CT, FNA, and surgical excision) is required to confirm. Over 600,000 thyroid FNAs are performed every year in the United States, and the number has been increasing annually by 16% (5). Despite this diagnostic gauntlet, approximately 20% of FNA results are classified indeterminate (Bethesda III/IV) with a 10-40% risk of malignancy (6). Cancer rates vary widely by institution, ranging from 6-48% for Bethesda III and 14-34% for Bethesda IV. Repeat FNA of Bethesda III nodules should be strongly considered as it leads to a more definitive reclassification in 60-65% (1). Previously, the majority of patients with an indeterminate FNA, confirmed on repeat aspiration, had diagnostic thyroid surgery (usually lobectomy), with most (75-95%) ultimately confirmed to be benign (6). Rates of thyroid surgery-specific postoperative complications (recurrent laryngeal nerve injury, permanent hypoparathyroidism, and postoperative hematoma) in high-volume institution studies range between 0.4-7.4%, but a population-based study found it as high as 12.3% (7).

In 2012, molecular marker testing (MT) became widely available as a potential method to augment risk stratification of indeterminate FNA results, ideally reducing the need for diagnostic thyroid surgery or completion thyroidectomy, with their attendant risks and costs. A patient with a low MT malignancy risk is potentially recommended for surveillance with serial ultrasounds to ensure nodule stability. Conversely, a high malignancy MT result could strengthen a recommendation to move forward with surgical removal (lobectomy or total thyroidectomy). Molecular profiling includes genomic alterations (such as point mutations, insertions, and deletions), gene fusions resulting in rearrangements or translocations, copy number variations, RNA-based gene expression, and/or micro-RNA (miRNA) expression (1).

In 2016, the nomenclature of encapsulated follicular variant of papillary thyroid cancer was changed to noninvasive follicular thyroid neoplasm with papillary-like nuclear features (NIFTP) in recognition of its highly indolent nature. Thus, the value of MT may arise both from the avoidance of surgery and the fact that surveillance is now a safer and more informed option (8). Conversely, given clinical guideline recognition that more limited cancer operation can lead to equivalent outcomes, the impact of molecular testing in directing the extent of surgical resection is diminished (9).


Thyroseqv3 (CBLPath, Inc.; Rye Brook, NY)

Thyroseqv3 is a targeted next-generation sequencing test that interrogates selected regions of 112 thyroid cancer-related genes for point mutations, insertions/deletions, gene fusions, copy number alterations, or gene expression alterations (5). A “genomic classifier” assigns a value to each detected genetic alteration based on the strength of association with malignancy: 0 (no association with cancer), 1 (low cancer probability), or 2 (high cancer probability). A score calculated for each sample is a sum of individual values of all detected alterations, with scores 0 and 1 accepted as test negative (score 1 commercially reported as currently negative) and scores 2 and above as positive.

This evidence summary is limited to the current version of Thyroseq (version 3). Also excluded are publications combining results from multiple Thyroseq versions in which version 3 results could not be specifically isolated (8,10,11).

In a multicenter prospective, blinded, clinical validation study of ThyroSeqv3, including 247 Bethesda III and Bethesda IV nodules in which both pathologist and clinicians were blinded to MT results, sensitivity was 94% (95% CI, 86%-98%) and specificity 82% (95% CI, 75%-87%). With a cancer/NIFTP prevalence of 28%, the negative predictive value (NPV) was 97% (95% CI, 93%-99%), the positive predictive value (PPV) was 66% (95% CI, 56%-75%), with a benign call rate (BCR) of 61% (5). The observed 3% false-negative rate was similar to that of benign cytology, and the missed cancers were all low-risk tumors. Results of 10 Bethesda V nodules are not separately reported.

In another Thyroseqv3 validation study, 238 surgically removed tissue samples were used as a training set and 175 indeterminate (Bethesda III, n=84; Bethesda IV, n=74; Bethesda V, n=17) FNAs were used as a validation set (12). The training set sensitivity was 93.9% (95% CI, 88.4%-96.9%), the specificity 89.4% (95% CI, 81.1%-94.3%), with an accuracy of 92.1% (95% CI, 87.8%-95.0%). The validation set sensitivity was 98.0% (95% CI, 92.9%-99.4%), the specificity 81.8% (95% CI, 71.8%-88.9%), with an accuracy of 90.9% (95% CI, 85.7%-94.3%). The sensitivity and specificity for Hürthle cell lesions in the training set was 92.9% (95% CI, 80.52%-98.50%) and 69.3% (95% CI, 48.21%-85.67%), respectively. A separate case study also showed a benefit in indeterminate Hürthle cell cytopathology (13).

In an independent, single-center, non-blinded observational study, a total of 50 Bethesda III/IV cytologically indeterminate nodules underwent ThyroSeqv3 testing (14). Molecular analysis yielded 20 (40%) "positive" results and 24 (48%) "negative" results. Six (12%) results were classified as "currently negative" or "negative but limited." All 20 “positive” patients underwent surgery, as well as both “currently negative” patients (n=2) and one patient with a “negative but limited” result (n=1). All 26 “negative” patients and one patient with a “negative but limited” result (n=1) continued with surveillance. In total, 23 (46%) patients underwent surgery and 27 (54%) patients were followed with conservative management. BCR was calculated as ("negative" and "currently negative")/total, resulting in a BCR of 58%. Ninety-one percent (20 of 22) of the resected target nodules were malignant on final pathology. Since surgery was not performed on test-negative patients, test specificity, sensitivity, and NPV were not available.

One retrospective 2019 review of 224 thyroid nodules with available ThyroSeqv3 Bethesda III or IV cytology had a BCR rate of 75% (15). In a hypothetical cost-effectiveness analysis, ThyroSeqv3 was superior to diagnostic lobectomy for indeterminate (Bethesda III/IV) nodules (16).


Analysis of Evidence (Rationale for Determination)

Guidelines emphasize reserving MT for thyroid nodules with equivocal clinical, cytopathologic, and radiographic factors. The 2015 American Thyroid Association (ATA) guideline for management of thyroid nodules has several cautious recommendations specific to MT (4): 1/ If molecular testing is being considered, patients should be counseled regarding the potential benefits and limitations of testing and about the possible uncertainties in the therapeutic and long-term clinical implications of results. (Strong recommendation, Low-quality evidence); 2/ For nodules with AUS/FLUS cytology, after consideration of worrisome clinical and sonographic features, investigations such as repeat FNA or molecular testing may be used to supplement malignancy risk assessment in lieu of proceeding directly with a strategy of either surveillance or diagnostic surgery (Weak recommendation, Moderate-quality evidence); 3/ Diagnostic surgical excision is the long-established standard of care for the management of FN/SFN cytology nodules. However, after consideration of clinical and sonographic features, molecular testing may be used to supplement malignancy risk assessment data in lieu of proceeding directly with surgery (Weak recommendation, Moderate-quality evidence); and 4/ When surgery is considered for patients with a solitary, cytologically indeterminate nodule, thyroid lobectomy is the recommended initial surgical approach. This approach may be modified based on clinical or sonographic characteristics, patient preference, and/or molecular testing when performed. (Strong recommendation, Moderate-quality evidence).

More recent guidelines are even more circumspect due to a combination of interim factors (9). The American Association of Endocrine Surgeons (AAES) 2020 guidelines echo recent heightened concerns with MT (1). They cite the following qualifiers: 1/ “follow-up independent studies have often reported diminished utility;” 2/ “providers and patients may also find it challenging to interpret MT results…potentially leading to over- or under-treatment;” 3/ “patient willingness to continue surveillance,” must be considered before obtaining MT; 4/ use of MT results to make clinical decisions relies on PPV and NPV which are contingent on regional and institutional cancer prevalence for each cytology category; and 5/ “because NIFTP decreases the risk of true malignancy for the indeterminate Bethesda categories the PPV of all MT will be impacted.” In other words as to the last point, given that molecular tests were developed and validated prior to this re-designation (and thus designed to classify this potential benign pathology as malignant), their performance measures have been shown to deteriorate significantly when the NIFTP designation is incorporated in the classification of indeterminate nodules (9). The impact of NIFTP reclassification is not trivial, as its average prevalence within indeterminate thyroid nodules is estimated to be 61% (range, 33-88%) (17,18).

AAES guidelines cite three specific MT recommendations: 1/ If thyroidectomy is preferred for clinical reasons, then MT is unnecessary. (Strong recommendation, moderate-quality evidence); 2/ When the need for thyroidectomy is unclear after consideration of clinical, imaging, and cytologic features, MT may be considered as a diagnostic adjunct for cytologically indeterminate nodules. (Strong recommendation, moderate-quality evidence); and 3/ Accuracy of MT relies on institutional malignancy rates and should be locally examined for optimal extrapolation of results to thyroid cancer risk. (Strong recommendation, moderate-quality evidence). Use of MT for Bethesda V nodules is not endorsed as they cite validation and utility studies as lacking. Specifically with respect for MT to guide extent of surgery, they note: “Further study will determine if genotype provides information that has not already been obtained clinically, by US imaging, and/or by cytologic classification, as well as determine if altering the initial extent of surgery based on MT results will affect outcomes.” UpToDate also restricts potential MT use to Bethesda III and IV nodules (6).

National Comprehensive Cancer Network (NCCN) guidelines have similar criteria (2). They make a point of adding that: “Molecular diagnostics may be useful to allow reclassification of follicular lesions (i.e., follicular neoplasm, AUS, FLUS) as either more or less likely to be benign or malignant based on the genetic profile….,” but “should be interpreted with caution and in the context of clinical, radiographic, and cytologic features of each individual patient.”

In summary, NGS supports judicious use of molecular testing of thyroid nodules in alignment with current guidelines. We look forward to additional independent, prospective studies that better define clinical utility, especially in the context of recent improvements in imaging (Thyroid Imaging, Reporting, and Data System (TIRADS) algorithm) and cytologic classification.

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  1. Patel KN, Yip L, Lubitz CC, et al. The American Association of Endocrine Surgeons Guidelines for the Definitive Surgical Management of Thyroid Disease in Adults. Ann Surg. 2020;271(3):e21-e93.
  2. NCCN: Thyroid Carcinoma Version 1.2021. https://www.nccn.org/professionals/physician_gls/pdf/thyroid.pdf. Accessed 7/15/21.
  3. National Cancer Institute Surveillance, Epidemiology, and End Results Program (SEER) Cancer Stat Facts: Thyroid Cancer. https://seer.cancer.gov/statfacts/html/thyro.html. Accessed 2/11/21.
  4. Haugen BR, Alexander EK, Bible KC, et al. 2015 American Thyroid Association Management Guidelines for Adult Patients with Thyroid Nodules and Differentiated Thyroid Cancer: The American Thyroid Association Guidelines Task Force on Thyroid Nodules and Differentiated Thyroid Cancer. Thyroid. 2016;26(1):1-133.
  5. Steward DL, Carty SE, Sippel RS, et al. Performance of a Multigene Genomic Classifier in Thyroid Nodules With Indeterminate Cytology: A Prospective Blinded Multicenter Study. JAMA Oncol. 2019;5(2):204-212.
  6. UpToDate: Evaluation and management of thyroid nodules with indeterminate cytology. https://www.uptodate.com/contents/evaluation-and-management-of-thyroid-nodules-with-indeterminate-cytology?search=thyroid%20nodule%20and%20algorithm&topicRef=7890&source=see_link. Accessed 2/11/21.
  7. Papaleontiou M, Hughes DT, Guo C, Banerjee M, Haymart MR. Population-Based Assessment of Complications Following Surgery for Thyroid Cancer. J Clin Endocrinol Metab. 2017;102(7):2543-2551.
  8. Zhu CY, Sha S, Tseng CH, et al. Trends in the Surgical Management of Known or Suspected Differentiated Thyroid Cancer at a Single Institution, 2010-2018. Thyroid. 2020.
  9. Khan TM, Zeiger MA. Thyroid Nodule Molecular Testing: Is It Ready for Prime Time? Front Endocrinol (Lausanne). 2020;11:590128.
  10. Schatz-Siemers N, Brandler TC, Oweity T, Sun W, Hernandez A, Levine P. Hurthle cell lesions on thyroid fine needle aspiration cytology: Molecular and histologic correlation. Diagn Cytopathol. 2019;47(10):977-985.
  11. Guan H, Toraldo G, Cerda S, et al. Utilities of RAS Mutations in Preoperative Fine Needle Biopsies for Decision Making for Thyroid Nodule Management: Results from a Single-Center Prospective Cohort. Thyroid. 2020;30(4):536-547.
  12. Nikiforova MN, Mercurio S, Wald AI, et al. Analytical performance of the ThyroSeq v3 genomic classifier for cancer diagnosis in thyroid nodules. Cancer. 2018;124(8):1682-1690.
  13. Pearlstein S, Lahouti AH, Opher E, Nikiforov YE, Kuriloff DB. Thyroseq V3 Molecular Profiling for Tailoring the Surgical Management of Hurthle Cell Neoplasms. Case Rep Endocrinol. 2018;2018:9329035.
  14. Chen T, Gilfix BM, Rivera J, et al. The Role of the ThyroSeq v3 Molecular Test in the Surgical Management of Thyroid Nodules in the Canadian Public Health Care Setting. Thyroid. 2020.
  15. Ohori NP, Landau MS, Carty SE, et al. Benign call rate and molecular test result distribution of ThyroSeq v3. Cancer Cytopathol. 2019;127(3):161-168.
  16. Nicholson KJ, Roberts MS, McCoy KL, Carty SE, Yip L. Molecular Testing Versus Diagnostic Lobectomy in Bethesda III/IV Thyroid Nodules: A Cost-Effectiveness Analysis. Thyroid. 2019;29(9):1237-1243.
  17. Nikiforov YE, Seethala RR, Tallini G, et al. Nomenclature Revision for Encapsulated Follicular Variant of Papillary Thyroid Carcinoma: A Paradigm Shift to Reduce Overtreatment of Indolent Tumors. JAMA Oncol. 2016;2(8):1023-1029.
  18. Sahli ZT, Umbricht CB, Schneider EB, Zeiger MA. Thyroid Nodule Diagnostic Markers in the Face of the New NIFTP Category: Time for a Reset? Thyroid. 2017;27(11):1393-1399.


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