OBJECTIVES: Screening of all patients diagnosed with colorectal cancer for Lynch syndrome using a staged testing procedure is currently recommended by Evaluation of Genomic Applications in Practice and Prevention (EGAPP) guidelines. Next generation sequencing (NGS) is a disruptive technology that likely offers improved outcomes, but its value is uncertain.  The goal of this study was to evaluate the cost effectiveness of NGS vs. tumor tissue testing for universal testing of patients with colorectal cancer (CRC) to detect relatives with Lynch syndrome. METHODS: We developed a decision model comparing IHC/MSI tumor tissue testing (IHC/MSI), followed by targeted sequencing of the suspected gene to two hypothetical universal screening strategies: (1) NGS as a reflex test to IHC/MSI testing if these tests suggest a protein abnormality; (3) use of a NGS gene panel in all patients with CRC. Outcomes measured were life-years gained, quality adjusted life years (QALY) gained, and costs, Sensitivity analyses were conducted to assess uncertainty. RESULTS: Compared to the reference strategy, the price per QALY gained was $196,000 for universal NGS gene panel testing. When using NGS gene panel as a reflex strategy to abnormal IHC/MSI, the price per QALY was $71,000. The most influential variables in the one-way sensitivity analysis were the number of relatives tested, the prevalence of Lynch syndrome in CRC patients and the cost of CRC surveillance in relatives with Lynch syndrome detected. CONCLUSIONS: Use of NGS in all colorectal cancer patients to detect inherited cancer and inform family members is unlikely to be cost-effective despite the lower per base pair sequencing cost of NGS. However, NGS may be cost-effective when used as a complement to tumor-tissue testing strategies. Further studies are needed to validate these findings.