Shares of CareDx Inc. (NASDAQ:CDNA) climbed roughly 20% on Thursday following publication of a finalized Medicare Local Coverage Determination (LCD) addressing molecular testing for solid organ allograft rejection.
The final LCD affirms Medicare coverage for CareDx’s transplant surveillance portfolio across kidney, heart and lung transplants, providing clearer reimbursement guidance for clinicians and patients relying on the company’s tests.
Under the kidney-specific provisions, the policy confirms Medicare coverage for AlloSure Kidney as a surveillance test. Coverage is outlined for up to six surveillance tests during the first year after transplant and up to four tests per year in the second and third years after transplant. CareDx reports that AlloSure Kidney patients currently receive an average of approximately three to four tests in the first year following transplant.
For heart transplant recipients, the LCD preserves coverage for both AlloMap and AlloSure Heart. The policy explicitly allows use of the two tests in combination when that is medically appropriate. For heart surveillance, Medicare coverage extends to as many as 12 tests in the first year post-transplant and up to four tests annually in years two and three.
Lung transplant surveillance is likewise covered under the LCD, with AlloSure Lung included. The coverage parameters for lung transplants mirror those for heart in the first three years: up to 12 surveillance tests in year one and up to four tests per year in years two and three.
Commenting on the decision, Dr. Jeffrey Teuteberg, Chief Medical Officer of CareDx, said: "The final policy reinforces the role of molecular surveillance in transplant patient management, providing important clarity for patients and clinicians."
The pathway to the final policy began with a proposed draft LCD released on July 17, 2025, which was open to public comment through August 31, 2025. The final LCD was published on July 16, 2026, and is expected to take effect on August 30, 2026.
Key points
- Medicare finalized a Local Coverage Determination that affirms coverage for CareDx molecular surveillance tests in kidney, heart and lung transplants.
- Coverage limits are specified: for kidney, up to six tests in year one and up to four per year in years two and three; for heart and lung, up to 12 tests in year one and up to four per year in years two and three.
- The final LCD was published on July 16, 2026, with an expected effective date of August 30, 2026.
Risks and uncertainties
- Timing and implementation: While the final LCD is published and expected to take effect on August 30, 2026, potential administrative or operational delays could affect when coverage is actually available to patients and providers.
- Utilization variability: Actual test utilization may differ from the coverage limits; for example, AlloSure Kidney patients currently receive an average of approximately three to four tests in the first post-transplant year, which is below the maximum permitted by the policy.
- Scope limited to specified surveillance years: The policy spells out coverage only for the first three post-transplant years with set test-frequency caps, leaving monitoring beyond that period outside the scope of this LCD.
This development directly affects the transplant diagnostics segment of the medical diagnostics and broader healthcare sector, with implications for providers managing transplant patient care and for companies offering molecular surveillance tests.