Australia approved funding for genomic testing in blood cancers. So why do so many patients still have to pay out of pocket?

When a patient is suspected of having leukaemia, lymphoma, or another blood cancer, their treating haematologist must urgently determine which type of cancer they have and choose the most appropriate therapy. Next-generation sequencing (NGS), which reads thousands of genetic mutations from a tumour sample, plays a critical role in accurate diagnosis and guiding therapy targeted to the specific genetic underpinnings of the tumour. Interpretation of NGS outputs requires a specialist team of scientists and haematologists to separate the signal from the noise. NGS can inform diagnosis, which treatment a patient receives, how aggressively they are treated, and often whether they need a stem cell transplant. Very often it is the critical piece of a complex diagnostic puzzle or can even change the diagnosis completely.

For patients with blood cancer, this genomic testing is no longer an optional extra. It is the standard of care.

NGS for patients with blood cancer was formally listed on the Medicare Benefits Schedule (MBS) in November 2023, after an application by the Royal College of Pathologists of Australasia (RCPA) and rigorous evaluation by the Medical Services Advisory Committee (MSAC) — the federal body responsible for assessing whether new medical technologies are clinically effective and cost-effective enough to receive Medicare funding. The decision came roughly two years after the RCPA submitted the application in mid-2021, reflecting the necessarily thorough, if slow, process of health technology assessment. 

Patients lost in the funding fault lines

On paper, genomic testing was now federally funded. But in practice, it is anything but straightforward.

Australia’s health system is infamously split: the federal government funds Medicare (including pathology through the Medicare Benefits Schedule (MBS)) and the pharmaceutical benefits scheme (PBS), while state and territory governments fund public hospitals. This division creates a fault line that runs directly through the care of blood cancer patients, and NGS sits squarely across it.

The crux of the problem is that most patients with blood cancer who require NGS also need to undergo either a bone marrow biopsy or a lymph node biopsy. Bone marrow is the diagnostic tissue of choice for most blood cancers; peripheral blood, while sometimes informative, can be less sensitive and less reliable for many conditions. Yet bone marrow biopsies are frequently performed on patients who have been formally admitted to hospital — a classification that, under Australia’s billing rules, typically precludes the simultaneous claiming of an MBS item number for pathology. Once a patient crosses the threshold from outpatient to inpatient, responsibility for funding their care shifts from federal to state government. NGS, in that context, becomes the hospital’s problem to fund, not Medicare’s. 

The consequences are real. Some public hospitals absorb the cost quietly, drawing on Activity Based Funding (ABF), the formula by which hospitals are reimbursed for their services, in ways that were not designed to accommodate expensive genomic tests. Others respond by testing on peripheral blood rather than bone marrow, sacrificing diagnostic sensitivity to avoid unreimbursed costs. Some hospitals go as far as to prevent clinicians from ordering NGS on admitted patients altogether, while others use internal cross-charging arrangements to shift cost between departments, creating financial disincentives to clinically appropriate testing. In many cases, patients may receive care that is subtly compromised by a billing technicality rather than a clinical decision. 

Different barriers at different hospitals

Hospitals vary in how they fund outpatient attendances and how extensively MBS billing is used in their outpatient models. This means that NGS testing may either be completely funded by MBS in some settings, inconsistently funded in others, or not funded at all. Access to funded NGS tests is dependent on the individual hospital, including their appetite for MBS billing and the extent of pressure on their activity-based funding (National Weighted Activity Unit [NWAU]) allocation.  

For patients treated in the private system, the barriers are different. Private pathology providers are permitted to charge fees above the MBS rebate, and for genetic testing, the gap between the MBS rebate and the actual cost of running the test can be substantial. Among the MBS categories of pathology, genetic tests are currently associated with by far the greatest out-of-pocket cost per patient (averaging more than $180 per patient, but often substantially more, and increasing). More troubling still is the opacity surrounding these gap fees. Patients are often not asked for informed financial consent prior to testing and in many cases, the ordering physician is also unaware of the costs ultimately billed to their patient. A clinician ordering a test in good faith, under the impression that it is covered by Medicare, may unknowingly set their patient up for an unexpected invoice. These bills often land without warning at very vulnerable moments in a person’s life.

MBS claims for haematology NGS have grown rapidly since listing, reaching >4,000 claims in the first quarter of 2026 (MBS data). That trajectory reflects genuine clinician enthusiasm and need for a tool that is essential to modern haematology practice and improving patient outcomes. But testing rates have already started to plateau, and the structural barriers described above are likely contributing. Uptake is variable across states, between public and private patients, and between metropolitan and regional centres. 

Practical reforms are needed

Establishing an MBS rebate for haematology NGS was an important achievement. But it was designed with outpatient billing in mind, for a test that is frequently required in the inpatient setting. The inpatient/outpatient distinction may have made some sense decades ago when pathology just meant routine blood counts or biochemistry panels. But in an era where a single genomic test can be both expensive and critically important for a patient, a broader financial agreement is urgently needed.

Three practical reforms could begin to fix this:

• Billing rules should be refined through an agreement between federal and state governments, so that NGS performed during a hospital admission can attract an MBS rebate, removing the structural disincentive to optimal clinical practice (there are already precedents for Commonwealth funding of inpatient therapies, such as PBS-funded eculizumab).
• Pathology providers must be required to disclose any anticipated out-of-pocket costs to both patients and clinicians before testing proceeds, not after. 
• The MSAC process, while rigorous, should develop streamlined pathways for evaluating genomic technologies so that the gap between evidence generation and funding recognition does not continue to stretch for years.

The case for haematology NGS has already been made — what remains is making it work in practice. MBS funding for genomics is a great start, but the task now is to ensure it is practically available to all patients, without financial surprises, regardless of where they live, whether they access care in private or public, or whether they happen to be admitted to hospital when they have a biopsy.

Dr Edward R Scheffer Cliff is a clinical haematologist and lecturer at the University of Melbourne who undertook a postdoctoral research fellowship at Harvard Medical School. He receives research funding from Arnold Ventures.

Associate Professor Piers Blombery is a clinical and molecular haematologist, director of the Wilson Centre for Blood Cancer Genomics at the Peter MacCallum Cancer Centre, and an associate professor in the Sir Peter MacCallum Department of Oncology at the University of Melbourne. He has consulted for, advised, or received honoraria from Adaptive Biotechnologies, Amgen, AstraZeneca, BeOne, Johnson&Johnson and Servier. 

Ms Alice Robinson is a Project Manager at the Peter MacCallum Cancer Centre specialising in Medicare Benefits Schedule (MBS) billing and funding optimisation. Her background includes honours research in haematopoietic stem cell transplantation and a Graduate Certificate in Business Administration.