With the government shutdown now stretching beyond two weeks, clinical laboratory leaders are beginning to feel the pinch. Experts warn that delays in Medicare payments could soon create cash-flow crunches and backlog claims well into November.
As the federal government shutdown stretches into its third week, laboratory leaders are warning of mounting financial pressure and potential payment delays that could disrupt operations and strain cash flow.
While clinical laboratories can continue to submit Medicare and Medicaid claims, the timing of reimbursements could soon become unpredictable. According to William Baus, a laboratory revenue cycle expert, who shared a visual on LinkedIn, “a government shutdown doesn’t stop you from submitting claims—but it can affect when you get paid.”
In his Oct. 11 post, Baus outlined the timeline of expected payment impacts. If the shutdown lasts fewer than 14 days (at the time this piece was written, the government shutdown entered its 17th day), Medicare reimbursements would have remained unaffected, since the Centers for Medicare and Medicaid Services (CMS) typically maintains a 14-day payment floor. But if the shutdown continues beyond that window (which it now has), the system begins to back up quickly.
For a 20-day shutdown, for instance, “payments are delayed about five business days,” Baus noted. Claims submitted October 1 would not pay out until October 21, creating a rolling backlog into November. “Bottom line,” he wrote, “a short shutdown = no impact. A longer shutdown = temporary cash-flow crunch.”
For independent laboratories and pathology groups, especially those with thin operating margins, these delays could create significant short-term liquidity challenges. Many smaller or privately owned labs depend on steady reimbursement cycles to cover payroll, reagents, and lease expenses. Even a week-long delay in large Medicare payments can tighten available cash.
Hospital and health-system labs may have more flexibility, but even they face potential ripple effects if system-wide financial operations slow down or if supply purchases and contractor payments need to be deferred.
Medicaid and ACA Impacts
Ann Lambrix, vice president of revenue cycle management at Lighthouse Lab Services, echoed those concerns in a LinkedIn post of her own, warning that providers should brace for payment delays as the shutdown continues. “Healthcare providers should prepare for potential delays in claim processing and payments from Medicare,” Lambrix wrote. She noted that while “Medicaid [is] funded through Q1 of next year,” proposed cuts to enhanced subsidies “may threaten ACA coverage for individuals choosing to obtain health insurance through marketplace plans.” Lambrix thanked William Baus for his visual summary of the shutdown’s financial ripple effects, underscoring how even temporary disruptions in federal operations can upend reimbursement timelines across the healthcare sector.
Operational Preparedness
Lab leaders should prepare contingency plans, including:
Closely monitoring accounts receivable aging reports for delayed remittances.
Reviewing cash reserves and establishing short-term credit options if needed.
Communicating with vendors and staff about possible timing issues.
Staying in contact with billing vendors and clearinghouses to track any system backlogs.
“Claims can still be submitted and processed electronically,” Baus emphasized, “but the payment cycle may slip depending on how long the shutdown lasts.”
The Takeaway
In the short term, laboratories should brace for administrative slowdowns rather than outright denials. Yet as the shutdown continues, payment backlogs could cascade, especially for labs heavily reliant on Medicare revenue.
For now, experts recommend vigilance, conservative spending, and clear communication with financial teams. As the shutdown persists, even well-run labs could feel the pinch of delayed federal payments before November begins.
Genetic, toxicology, and even routine panels can create pitfalls for clinical laboratories.
Clinical laboratory professionals involved with diagnostic billing and coding should double check claims submitted for routine, toxicology, and genetic testing. Those three testing types are inviting private payer scrutiny and possibly worse.
“Between audits, denials, and government crackdowns, the risks are higher than ever,” said Jamel Giuma, founder and CEO at JTG Consulting Group, a laboratory IT consulting company.
Routine Panels Can Create Headaches for Lab Billing
Giuma explained that when it comes to diagnostic billing and coding, three testing areas often get oversized attention from commercial payers and the Medicare program:
Routine panels. Lab professionals should beware of overordering these types of tests, such as lipid or metabolic panels. High volumes have attracted payer audits, Giuma said. The US Department of Health and Human Services’ Office of Inspector General (OIG) has previously noted investigations where lipid panels were billed with direct low-density lipoprotein cholesterol tests to the same patient on the same day, which the OIG said was medically unnecessary.
Toxicology tests. Some drug testing panels to detect pain management or substance abuse have received scrutiny in 2025 for their ordering frequency.
Genetic testing. Expensive DNA and molecular assays may get an extra look from insurers, particularly services that get tagged with CPT code 81479. The code is a vague catch-all for unlisted molecular pathology procedures. The Dark Report has noted that using 81479 is essentially begging a payer to review the claim. Giuma added that this can be a tricky area for labs developing investigational tests.
Giuma said based on data he has reviewed, payers initially deny one in five clinical lab billing claims. “That is staggering,” he noted.
Jamel Giuma noted that one of every five clinical lab billing claims gets denied by payers, making the submission process a thorny one for laboratories. (Photo credit: JTG Consulting)
Investigators Eye Laboratory Test Fraud
Meanwhile, the OIG, auditors from the Centers for Medicare and Medicaid Services, and investigators from the US Department of Justice also scrutinize diagnostic billing and coding patterns.
“They’re looking for repeat offenders or systematic over-coding,” Giuma said.
Earlier this year, as part of the largest healthcare fraud bust in US history, dozens of clinical laboratories were charged with Medicare fraud for alleged telemedicine and genetic testing schemes where deceptive telemarketing campaigns targeted Medicare beneficiaries.
Even the most scrupulous labs should heed the indictments from the fraud investigations. All laboratories can run into trouble if they don’t stay on top of compliance efforts to detect fraud risks.
Documentation of billing code justifications and claims submissions are a solid first line of defense, Giuma said.
Also, labs should closely monitor prior authorization processes and understand associated rules from payers, he added.
Giuma’s advice emphasizes that diagnostic billing and coding is an area that clinical labs can unnecessarily get snarled in if providers are not careful about how and when they order tests.
Lab leaders warn that without the RESULTS Act, up to 800 common tests could see steep Medicare payment cuts, threatening patient access and community laboratory stability.
Clinical laboratory leaders have been expressing concern over looming Medicare payment cuts they say could destabilize their operations, threaten patient access, and undermine preparedness for future public health crises. With reductions of up to 15% scheduled to take effect in 2026, the introduction of the bipartisan Reforming and Enhancing Sustainable Updates to Laboratory Testing Services (RESULTS) Act is being hailed by lab organizations as a lifeline to preserve financial stability and ensure seniors continue to receive timely, high-quality diagnostic testing.
US Senators Raphael Warnock (D-GA) and Thom Tillis (R-NC), along with a bipartisan coalition of House members, introduced the RESULTS Act on Sept. 10, 2025, to reform how Medicare pays for clinical laboratory services, a move aimed at protecting seniors’ access to essential diagnostic tests and stabilizing the nation’s lab infrastructure.
The legislation seeks to overhaul the payment system established under the Protecting Access to Medicare Act (PAMA) of 2014. While PAMA was intended to align Medicare rates with private insurers, laboratory groups argue that the way the law was implemented resulted in steep, unsustainable cuts. Without reform, payment reductions of up to 15% are scheduled to hit more than 800 commonly ordered tests starting January 1, 2026, and again in subsequent years.
“Access to quality clinical labs is essential to keeping our seniors living long, healthy lives,” said Warnock. “I’m proud to partner with my colleague Senator Tillis to put forward this legislative fix that will help ensure Georgia seniors will continue to have access to high-quality diagnostic services.”
Tillis emphasized that the bill is about long-term stability. “It is critically important that seniors have uninterrupted access to innovative diagnostic tests,” he said. “The RESULTS Act is a necessary step toward ensuring this access and supporting seniors’ healthcare needs. I’m proud to work with my colleagues to permanently fix flawed data collection and reporting methods which will allow Medicare beneficiaries to continue receiving quality and affordable lab services.”
CAP: Current Cuts Would “Undermine” Lab Operations
“The CAP supports congressional efforts to improve the PAMA rate-setting process for clinical lab services and reduce unnecessary burdens on laboratories,” said CAP president Donald S. Karcher, MD, FCAP.
Donald S. Karcher, MD, FCAP, CAP president noted, “Under the current structure dictated by PAMA, the severity of fee reductions would undermine the operational infrastructure of clinical laboratories throughout the United States. The RESULTS Act will mitigate these cuts, avert needless loss in access to care, and allow laboratories to continue providing timely, high quality clinical services for patients. We urge Congress to pass the RESULTS Act before cuts take effect on January 1, 2026.” (Photo credit: CAP)
ACLA: Nearly $4 Billion Cut Already
The American Clinical Laboratory Association (ACLA) also praised the legislation, calling it essential to protect access to both routine and advanced diagnostics. The group noted that implementation of PAMA slashed nearly $4 billion from the Medicare Clinical Laboratory Fee Schedule in just three years.
“When PAMA was implemented, this goal was not achieved, as CLFS [Clinical Laboratory Fee Schedule] rates were set based on data collected from less than 1% of all laboratories, resulting in artificially low payment rates,” ACLA said. Without intervention, “about 820 laboratory tests’ CLFS rates will be cut by up to 15% beginning January 1, 2026, threatening patient access to routine and life-saving diagnostics.”
ACLA president Susan Van Meter underscored the importance of laboratories in guiding medical decisions. “Clinical laboratories deliver essential information that individuals need to better understand their own health status, while also serving as the backbone of our healthcare system, providing the results that inform 70% of medical decisions,” she said. “As our industry continues to innovate and tailor healthcare solutions through personalized medicine, the RESULTS Act is a critical step to safeguard access to these life-saving tools, reinforce our healthcare infrastructure, and support continued innovation in laboratory medicine.”
“NILA applauds the bipartisan introduction of the RESULTS Act and urges Congress to quickly pass this vital legislation to strengthen our nation’s clinical laboratory infrastructure,” said NILA’s executive director Mark S. Birenbaum, PhD. “Our members are facing up to 15% in cuts to many of the most common laboratory tests; without immediate reform to PAMA this year, regional and community clinical laboratories could be forced to close their doors, leaving patients without access to critical laboratory testing.”
Birenbaum added that continued cuts could also erode preparedness for future public health emergencies. “PAMA cuts have weakened our nation’s community and regional clinical laboratories by leaving them without the necessary resources to continue providing essential services to people across the country,” he said. “Further cuts would continue to harm this infrastructure and threaten the ability of clinical laboratories to be prepared for a future pandemic or public health emergency.”
What the Bill Would Do
The RESULTS Act proposes several key reforms:
Adjust data reporting requirements and allow CMS to work with an independent third-party to collect more representative data
Exclude Medicaid managed care organizations from the definition of private payors
Cap annual Medicare payment cuts at 5% instead of 15%, while allowing increases with no cap
Extend the reporting cycle to every four years
Make payment rates subject to administrative or judicial review
Both widely available and more specialized tests would be covered under the new structure, using a mix of independent claims databases and targeted lab reporting to set accurate rates
Supporters say these changes would reduce administrative burden, stabilize Medicare reimbursement, and protect seniors’ access to vital testing.
“Congress has an opportunity this year to ensure long-term stability for the nation’s clinical laboratories,” ACLA’s Van Meter said. “We look forward to working with lawmakers to deliver this urgently needed reform.”
A more in-depth look at the RESULTS Act will be featured in the next edition of The Dark Report. (If you’re not a Dark Report subscriber, check out our 14-day free trial.)
Federal investigations into UnitedHealth’s Medicare billing could impact clinical labs and reshape diagnostic workflows.
The intensifying federal investigation into UnitedHealth Group’s Medicare Advantage billing practices is making headlines in both major outlets and industry-specific trade publications. Clinical laboratories have the potential to soon feel the effects. As questions grow around how the insurance giant gathers and codes medical diagnoses, labs that play a role in confirming those diagnoses could see heightened regulatory oversight, increased documentation requirements, and a more complex reimbursement landscape.
According to an article from The Associated Press, on July 24, UnitedHealth Group, the largest U.S. provider of Medicare Advantage (MA) plans, revealed in a Securities and Exchange Commission (SEC) filing that it is now cooperating with both criminal and civil investigations by the Department of Justice (DOJ). The probes are centered on allegations that the company inflated patient diagnoses in order to receive larger payments from the federal government. These investigations, which were first surfaced in reports by The Wall Street Journal earlier this year, are now confirmed.
UnitedHealth Comments on Investigation
UnitedHealth said it initiated contact with the DOJ after the reports came to light and is already responding to information requests. The company also announced it has launched a third-party review of its business policies and performance metrics, which is expected to conclude by the end of the third quarter, according to comments made to CNBC.
“UnitedHealth has full confidence in its practices and is committed to working cooperatively with the Department throughout this process,” the company stated in its filing.
The DOJ’s criminal investigation reportedly includes interviews with doctors about whether they were pressured to submit claims for certain diagnoses that would lead to higher MA payments. A civil inquiry into the company’s billing practices has been underway since February. Both investigations center around suspicions that UnitedHealth used retrospective chart reviews and in-home health assessments—often carried out by clinicians contracted through its Optum unit—to bolster patient risk scores and inflate payments from Medicare.
What this Might Mean for Clinical Labs
Clinical laboratories may be affected, as lab-generated diagnostic data is frequently used to support or validate the conditions coded for reimbursement. If regulators demand greater transparency or auditing of how diagnostic data is linked to MA billing, labs could face increased scrutiny on test utilization, data accuracy, and coding practices.
CNBC reported that UnitedHealth has pushed back against some of the scrutiny. The company noted that Centers for Medicare & Medicaid Services (CMS) audits have found its practices to be “among the most accurate in the industry.” It also cited a special master’s recommendation in March in an ongoing legal case stemming from a whistleblower complaint that accused the company of withholding $2 billion in Medicare payments. In that case, the special master concluded that the DOJ had insufficient evidence to proceed.
As for the timing of the DOJ confirmation, UnitedHealth has had a challenging year. The company has endured stock volatility, leadership upheaval, and broader reputational risks. In May, CEO Andrew Witty abruptly resigned, and earlier in the year, the firm dealt with the fatal shooting of UnitedHealthcare CEO Brian Thompson in New York City. UnitedHealth is also still recovering from a massive cyberattack that disrupted operations across its network.
“This all sounds logical as it moves forward with a new CEO,” wrote Jared Holz, healthcare strategist at Mizuho Securities, in a note to clients July 24, while noting that UnitedHealth had previously denied being under federal investigation.
Jared Holz, Mizuho healthcare sector strategist, said UnitedHealth’s choice to acknowledge the probes and cooperate with the department “all sounds logical as it moves forward with a new CEO.”
The Medicare and Retirement division, which includes the Medicare Advantage business, brought in $139 billion in revenue last year, making it UnitedHealth Group’s largest segment. But medical costs have surged, particularly among new MA enrollees. UnitedHealth suspended its 2025 forecast and withdrew guidance altogether in May due to financial uncertainty.
For clinical labs, payers, and providers, the situation underscores a growing federal focus on Medicare Advantage oversight, potentially reshaping not only billing practices but also the data and diagnostics behind them.
The Department of Justice steps beyond the law’s original focus on opioid-related lab testing fraud
An interesting aspect with enforcement of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) is the government’s willingness to go after charges tied to fraudulent COVID-19 testing.
The case U.S. vs. Malena Badon Lepetich provides a good example of this approach. A grand jury indicted Lepetich on various healthcare fraud charges last year, including that she allegedly offered to pay kickbacks for referrals of specimens for COVID-19 testing.
“The government had really only used EKRA in the context of addiction treatment space,” attorney Alexander Porter, a Partner at law firm Davis Wright Tremaine in Los Angeles, said in the latest issue of The Dark Report. “The Lepetich case shows that the government’s going to use EKRA beyond that context and go into other areas where they think that it can be useful—in particular, in the area of COVID-19 testing.”
Clinical laboratories and pathology groups should take note of this development.
Attorney Alexander Porter said EKRA enforcement now goes after fraudulent COVID-19 testing. (Photo: Davis Wright Tremaine)
Defendant Allegedly Filed $10 Million in Fraudulent Lab Claims
Lepetich was the owner of MedLogic, a clinical laboratory in Baton Rouge, La.
In addition to the fraudulent COVID-19 testing charges, she allegedly solicited and received kickbacks in exchange for referrals of urine specimens for medically unnecessary tests, according to the U.S. Department of Justice (DOJ).
EKRA Provisions Rose from the Opioid Crisis in the U.S.
EKRA is a criminal law that falls under the Communities and Patients Act, which lifted restrictions on medications for opioid treatment and sought to limit overprescribing of opioid painkillers. Originally, EKRA targeted fraudulent practices at sober homes and substance abuse treatment centers. However, the final draft of the bill added clinical laboratories to the list of providers under potential scrutiny.
At the time Congress passed EKRA, the law was primarily aimed at fraudulent activity in opioid treatment centers, including related lab testing.
Thus, the government’s use of EKRA in the COVID-19 charges against Lepetich case is newsworthy and establishes a precedent, noted Porter. He’ll speak about EKRA at the 2022 Executive War College on Laboratory and Pathology Management. The event takes place April 27-28 in New Orleans.
A contentious part of EKRA for clinical laboratories and pathology groups is that certain conduct protected under the federal Anti-Kickback Statute is treated as a criminal offense under EKRA. Some common lab practices come under that confusing designation, such as paying lab sales reps on a commission-based formula based on testing volumes they generate.
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