Genetic tests make up just 5% of volume but now drive 43% of Medicare Part B lab spending, according to OIG’s latest report.
Medicare Part B spending on clinical laboratory testing rose to $8.4 billion in 2024, a 5% increase over the previous year, according to the Department of Health and Human Services’ Office of Inspector General (OIG). For laboratory professionals, the headline is not just rising spending—it’s where the money is flowing.
Although genetic tests accounted for only 5% of all Part B tests performed in 2024, they represented 43% of total lab spending—$3.6 billion. In contrast, the far larger volume of routine chemistry, hematology, and other non-genetic tests generated $4.8 billion. Spending on non-genetic testing has generally declined since 2021, while genetic testing expenditures climbed 20% between 2023 and 2024 alone.
Utilization trends help explain the shift. The number of genetic tests paid under Part B increased 160% between 2018 and 2024, reaching 18 million tests last year. Meanwhile, non-genetic testing volume declined 12% over the same period. More enrollees are receiving at least one genetic test per year, and per-enrollee payments for those services are rising sharply.
Genetic Testing Drives Revenue Growth
In 2024, Medicare paid an average of $794 per enrollee for genetic testing—a 26% jump from 2023. By comparison, per-enrollee spending for non-genetic testing remained relatively stable at just over $200 annually. Even as overall Part B enrollment receiving clinical lab services declined 15% since 2018, spending per genetic-testing patient increased, amplifying the financial impact of molecular diagnostics on lab revenue.
OIG suggests the decline in Part B enrollees receiving lab tests may reflect migration to Medicare Advantage plans. For independent labs heavily dependent on traditional fee-for-service Part B volume, this shift adds another layer of financial pressure and underscores the need to monitor payer mix closely.
Attorney Alissa D. Fleming, a shareholder at Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, told The Dark Report that federal audit risks have increased because of the OIG’s genetic test findings. The Dark Report is a sibling brand to Dark Daily.
High-Dollar Molecular Codes Dominate the Top 25
The concentration of revenue in high-priced molecular assays is intensifying. In 2024, 346 laboratories received more than $1 million in Medicare payments for genetic tests; 55 labs exceeded $10 million. The top 25 laboratory procedure codes accounted for nearly half of all Part B lab spending—more than $4.1 billion.
Genetic tests dominated the fastest-growing segments. CPT code 87798—used for infectious agent detection by nucleic acid when no organism-specific code exists—generated $443 million in 2024, a 51% increase over 2023, making it the highest-paid lab test under Part B. An epilepsy genomic panel (CPT 81419) posted a fivefold spending increase year over year. Several oncology liquid biopsy assays remain among the highest-reimbursed tests, with median payments reaching into the thousands of dollars.
Routine Testing Holds Volume—but Not Spending Power
In contrast, routine tests familiar to every clinical laboratory—comprehensive metabolic panels (80053), CBCs (85025), lipid panels (80061), thyroid testing (84443), and A1C (83036)—either declined or remained flat in spending. Comprehensive metabolic panel spending has dropped 25% since 2018 and fell from the top spending position in 2023 to second place in 2024. These high-volume, low-margin tests continue to anchor daily lab operations but represent a shrinking share of total Medicare dollars.
Importantly, OIG notes that these shifts are not driven by changes in the Clinical Laboratory Fee Schedule, which has remained largely frozen since 2020 under provisions from the Protecting Access to Medicare Act. Instead, spending growth reflects changes in utilization, test mix, and per-enrollee costs.
For clinical laboratory leaders, the message is clear: Medicare’s lab dollars are increasingly concentrated in molecular diagnostics. That shift brings opportunity—but also heightened regulatory scrutiny. OIG’s history of fraud alerts and audits in genetic testing suggests that compliance, documentation, and medical necessity controls will remain critical as high-complexity testing continues to expand within the Medicare population.
This article was created with the assistance of generative AI and has undergone editorial review before publishing.
Promising retrospective results raise long-term possibilities for labs, even as clinical and regulatory plans remain unclear.
NIH-supported researchers have identified a new four-marker blood test that may improve the early detection of pancreatic ductal adenocarcinoma (PDAC), one of the deadliest and most difficult cancers to diagnose at a treatable stage. The findings, published in Clinical Cancer Research, could have long-term implications for clinical laboratories if the approach is validated in future studies, though significant hurdles remain before it could reach routine clinical use.
Pancreatic cancer has a notoriously poor prognosis, largely because it is often diagnosed after the disease has already advanced. According to the researchers, “only about 1 in 10 pancreatic cancer patients survive more than five years from diagnosis.” By contrast, survival improves substantially when tumors are detected early. However, as the authors note, “there are no current screening methods” capable of reliably identifying pancreatic cancer before symptoms appear.
Why Existing Markers Fall Short
In the study, investigators from the University of Pennsylvania’s Perelman School of Medicine and the Mayo Clinic used a phased, retrospective approach to evaluate blood-based biomarkers using banked samples. Two previously studied markers—carbohydrate antigen 19-9 (CA19-9) and thrombospondin 2 (THBS2)—were included because of their historical relevance in pancreatic cancer research. CA19-9, for example, is commonly used in clinical settings to monitor treatment response.
However, neither marker has proven suitable for population screening. CA19-9 “can be elevated in people with benign conditions such as pancreatitis and bile duct obstruction,” and some individuals “don’t produce it at all due to genetic factors,” limiting its clinical specificity and sensitivity. These limitations are well known to laboratory professionals who routinely interpret CA19-9 results in oncology workflows.
The researchers identified two additional proteins—aminopeptidase N (ANPEP) and polymeric immunoglobulin receptor (PIGR)—that were elevated in early-stage pancreatic cancer patients compared with healthy controls. When combined with CA19-9 and THBS2, the resulting four-marker panel demonstrated improved performance.
For all cancer stages combined, the panel distinguished pancreatic cancer cases from non-cases 91.9% of the time at a false positive rate of 5%. For early-stage disease (stage I and II), the test identified 87.5% of cases.
“By adding ANPEP and PIGR to the existing markers, we’ve significantly improved our ability to detect this cancer when it’s most treatable,” said lead investigator Kenneth Zaret, PhD. (Photo credit: Perelman School of Medicine at the University of Pennsylvania)
Encouraging Performance, Early Days
Importantly for clinical laboratories, the test was able to differentiate cancer patients not only from healthy individuals, but also from patients with non-malignant pancreatic conditions, including pancreatitis—an area where many candidate biomarkers have historically struggled.
Despite the promising results, the authors stress that the findings are preliminary. “Our retrospective study findings warrant further testing in larger populations, particularly in people before they show symptoms,” Zaret said. He added that so-called “prediagnostic” studies would be required to determine whether the assay could be used as a screening tool in high-risk populations, such as individuals with a family history of pancreatic cancer or known genetic risk factors.
Notably, neither the NIH announcement nor the published coverage includes any public information about plans for FDA submission, commercialization, or clinical deployment of the test. There is no mention of whether the assay would be developed as a laboratory developed test (LDT), licensed to a diagnostics company, or pursued through a formal regulatory pathway.
For now, the four-marker panel represents a research advance rather than a near-term clinical offering. Still, it highlights how multi-analyte blood tests may eventually reshape cancer screening—and presents an area for clinical laboratories to watch closely as validation studies progress.
The CDC’s Traveler-Based Genomic Surveillance program has surpassed one million voluntary participants, strengthening border-based genomic monitoring that helps clinical, molecular, and public health laboratories detect emerging variants—often days before they appear in community testing, hospital admissions, or public sequence databases.
The CDC announced that its Traveler-Based Genomic Surveillance (TGS) program has surpassed one million voluntary participants, marking a significant expansion of the nation’s upstream pathogen surveillance infrastructure. For clinical, molecular, and public health laboratories, the milestone highlights how border-based genomic monitoring is increasingly being used to identify emerging variants before they appear in community testing or hospital admissions.
Launched in 2021, TGS collects anonymous nasal swabs from arriving international travelers at select U.S. airports and complements this data with aircraft wastewater sampling. Sequencing and analysis are conducted through public-private partnerships with companies such as Ginkgo Biosecurity and XWell, allowing the CDC to generate actionable genomic data even when testing and sequencing capacity may be limited in other parts of the world. The approach reflects a shift toward proactive surveillance models that rely on rapid sequencing and data sharing rather than traditional case-based reporting alone.
Photo credit: CDC
In 2023, Dark Daily reported that San Francisco International Airport became the first US airport to partner with the CDC to test aircraft wastewater for SARS-CoV-2, sending samples to clinical laboratories for PCR testing and genomic sequencing as an early warning system for emerging variants.
Early Genomic Signals Give Laboratories Critical Lead Time on Emerging Variants
CDC officials say the program has already demonstrated practical value for laboratories. In one example, TGS identified new influenza H3N2 subclades and submitted sequences to public databases several days before they were detected elsewhere. For laboratory leaders, early awareness of emerging variants can inform assay validation, test menu planning, reagent procurement, and staffing decisions—particularly during respiratory virus season when demand can shift quickly.
The program also signals a growing role for nontraditional specimen sources in public health surveillance. In addition to traveler samples, CDC has analyzed more than 2,600 aircraft wastewater samples, reinforcing interest in wastewater-based epidemiology as a complementary tool for laboratories and public health agencies seeking earlier signals of emerging threats.
Participation in TGS remains voluntary and anonymous, but its scale suggests increasing acceptance of genomic surveillance as part of routine public health operations. For laboratories, the program offers a preview of how future surveillance systems may operate—integrating high-throughput sequencing, public-private partnerships, and unconventional sampling to deliver earlier warning of pathogens likely to impact diagnostic testing and clinical workflows nationwide.
The Theranos case continues to resonate in the lab community, reminding professionals of the importance of validation, transparency, and accountability.
Elizabeth Holmes, the former CEO of Theranos whose company became synonymous with laboratory fraud, has formally requested an early release from federal prison, renewing attention on one of the most consequential scandals in modern diagnostics.
According to filings with the US Department of Justice’s Office of the Pardon Attorney, Holmes has asked President Donald Trump to commute her sentence, a request that remains under review. If granted, the commutation could shorten her 11-year sentence by nearly six years.
Holmes was convicted in 2022 on multiple counts of wire fraud and conspiracy for misleading investors about Theranos’ blood-testing technology. She began serving her sentence in 2023 at a minimum-security federal prison camp in Bryan, Texas, and is currently scheduled for release on December 30, 2031. Both CNN and ABC News report that a federal appeals court last year upheld Holmes’ conviction, sentence, and a $452 million restitution order that she shares with former Theranos President Ramesh “Sunny” Balwani.
When Hype Outruns the Science
For clinical laboratory professionals, the case remains a stark reminder of the consequences when scientific validation is subordinated to hype.
Theranos claimed it could run hundreds of diagnostic tests using only a few drops of blood—assertions that, if true, would have dramatically reshaped laboratory workflows, patient access, and cost structures. Instead, investigations revealed that the company relied heavily on conventional analyzers while misrepresenting the performance and use of its proprietary technology.
Elizabeth Holmes is currently serving an 11-year sentence at the Federal Prison Camp in Bryan, Texas, for defrauding investors in her company, Theranos; she began her sentence in May 2023 and is eligible for release in December 2031, though she recently asked President Trump to commute her sentence for early release. (Photo credit: Wikimedia Commons.)
The appeals court ruling reinforced a critical principle for the diagnostics industry: financial success, celebrity boards, and political connections do not insulate companies from accountability when analytical validity and transparency are lacking. Judges rejected arguments that legal errors tainted the trial and upheld restitution based on the full amount investors lost, underscoring how severely courts view deception tied to medical testing claims.
As noted by The Dark Report during Holmes’ trial in 2021, testimony provided a series of lessons about how directors of a CLIA-certified labs can be held accountable for violations of federal and state laws.
Why Theranos Still Matters
Holmes’ renewed online visibility has also drawn renewed attention within the laboratory and diagnostics community. According to the CNN article, in recent months, posts have reappeared on her X account, including messages praising Trump’s healthcare affordability efforts and asserting her innocence. While the White House does not comment on pending clemency petitions, the optics of a high-profile fraud case intersecting with presidential pardons, particularly in a second Trump term marked by several controversial commutations, has revived debate about accountability in healthcare innovation.
For laboratories navigating patient expectations, evolving regulatory oversight, and the growth of direct-to-consumer testing, the Theranos case remains a relevant point of reference. The case is frequently cited by regulators and payers as justification for stricter oversight of laboratory-developed tests, more aggressive enforcement actions, and heightened expectations for data integrity.
Regardless of whether Holmes’ sentence is ultimately commuted, her request serves as a reminder that trust in laboratory medicine is hard-won and easily lost. For professionals, the case underscores the importance of scientific rigor, transparent validation, and strong governance in maintaining credibility and trust.
Federal health officials have updated cervical cancer screening guidelines to add HPV self-collection and require insurer coverage starting in 2027, a shift that could significantly impact testing volumes and workflows for clinical laboratories.
In a move that could significantly reshape testing volumes, workflows, and access strategies for clinical laboratories, the US Health Resources and Services Administration (HRSA) said in a press release that it has issued updated cervical cancer screening guidelines that formally introduce patient self-collection as a new screening option..
Under the updated guidance, high-risk human papillomavirus (hrHPV) testing—using either clinician-collected or patient-collected samples—is now the preferred screening method for average-risk women ages 30 to 65, while Pap testing remains an option. For women ages 21 to 29, Pap testing continues to be recommended.
The guideline also includes a major payer-facing provision that lab leaders should note. HRSA said most insurance plans will be required to cover not only the screening itself, but also any additional testing needed to complete the diagnostic process following an abnormal result. That coverage requirement takes effect January 1, 2027, reducing patient cost barriers that have historically limited follow-up testing volumes.
“These updates represent a significant step forward in cervical cancer screening and will improve screening rates and save lives,” HRSA Administrator Tom Engels said, adding that expanded options and reduced financial barriers allow more women to “take an active role in protecting their health and their future.” (Photo credit: HRSA)
HRSA Update Sets Stage for Insurer-Covered At-Home Testing Starting in 2027
An article from ABC News said the HRSA update aligns federal preventive guidance with recent FDA approvals that now allow both in-clinic and at-home self-collection for HPV testing. The January 2027 deadline for private insurers is expected to accelerate adoption of home-based and alternative specimen collection models.
“The addition of self-collection really empowers women to make this choice for themselves,” Ann Sheehy, MD, HRSA’s chief medical officer, told ABC News. “We do retain the option for Pap smear … this is just an additional choice for women.”
ABC News stated the preferred screening cadence for women ages 30 to 65 is now primary hrHPV testing every five years, whether the sample is collected by a clinician or by the patient. Alternative pathways—co-testing every five years or Pap testing every three years—remain in place if HPV testing is unavailable, preserving flexibility for labs at different stages of HPV test adoption.
HRSA officials emphasized that the goal is expanded access, not replacement of existing workflows. Engels told ABC News that self-collection could help reach women who have “been falling through the cracks,” adding, “By doing that, we’re going to save lives.”
ABC News noted the guidance also clarifies insurer obligations for follow-up diagnostics, including Pap testing, biopsy, and laboratory work, a move designed to prevent cost-sharing from disrupting care pathways. Separate HRSA rules now also require coverage of patient navigation services, which may further increase completed diagnostic testing after abnormal screens.
The American Cancer Society’s (ACS) December 2025 guideline update helped shape the federal move, ABC News said, citing evidence that self-collection improves access without sacrificing accuracy. “The combination of good evidence of the benefits of self-collection, which include increased access to cervical cancer screening, combined with FDA approval, led the ACS and HRSA to include self-collection,” said Robert Smith PhD, senior vice president of early cancer detection science at the ACS.
For lab professionals, HRSA’s announcement underscores a coming shift: broader HPV test demand, increased importance of validated self-collection workflows, and potentially higher follow-up testing volumes as cost barriers fall and screening gaps narrow.
New recommendations highlight the limited impact of routine urine drug testing in the ED while calling on laboratories to refine test menus, expand fentanyl screening, and improve clinician education to better support trauma care, behavioral health referrals, and evolving regulatory demands.
Emergency department (ED) drug testing remains a common but often misunderstood tool. New guidance from the Association for Diagnostics & Laboratory Medicine (ADLM) underscores the need for laboratories to take a more deliberate, evidence-based role in how testing is ordered, performed, and interpreted.
“Toxicology testing in the emergency department (ED) is generally performed to detect either drugs with recreational or misuse potential, or a broad array of toxic or poisonous compounds,” the guidance notes. This document focuses on the first category, historically referred to as “drugs of abuse” (DOA). While the term “abuse” “can imply a stigma, and is not a comprehensive term given the range of intended uses for these compounds,” it remains “a well-known historical term and description.”
Although resources exist for language describing individuals who use these substances, the document emphasizes that “there is no single preferred term to describe nonmedical use of these drugs.” Alternatives such as “recreational,” “controlled,” “illicit,” or “non-prescribed” drugs were considered, but “none of these terms fully captures the range of clinically relevant scenarios involving use of these compounds.” For this guidance, the term “drugs of misuse” is used “as a parallel to the historical DOA terminology,” while acknowledging that “future efforts should prioritize development of less-stigmatizing language that more accurately reflects the range of uses for these compounds.”
Urine Drug Testing
According to ADLM’s guidance, ED and laboratory staff should work collaboratively to establish objective protocols or clearly defined clinical rationales for ordering drug testing in both adult and pediatric patients, keeping in mind that urine drug testing (UDT) results rarely alter acute emergency management. Experts note that UDT is most often used in adults to assess trauma cases, altered mental status, or possible substance use contributing to psychiatric symptoms, yet routine testing has limited clinical value.
Studies indicate that UDT can prolong ED length of stay without significantly improving detection of substance use disorders beyond patient self-report. The American College of Emergency Physicians advises against routine drug screening in alert patients or delaying psychiatric evaluation while awaiting results, though some state regulations still require testing prior to involuntary commitment. These regulatory requirements place additional responsibility on laboratories to provide rapid reporting and maintain clear communication with receiving facilities.
Laboratories should educate ED and specialty providers regarding the limitations of UDT, including the potential for false positives and false negatives, and emphasize that detection of a substance may indicate past exposure rather than current impairment or clinical effect. Assessment of which drug testing methods best support pediatric care is particularly important, given the unique clinical considerations in this population.
Ongoing collaboration between ED and laboratory teams is essential to ensure that testing practices are aligned with clinical needs, patient populations, and available resources, while supporting downstream decisions such as resource allocation, behavioral health referrals, and patient safety.
Trauma Screening and Test Menus: Balancing Clinical Value, Regulation, and Evolving Drug Use
ADLM’s new guidance document also states that trauma care represents another frequent use case for ED drug testing, with the American College of Surgeons supporting substance use screening for all adult trauma patients. Yet laboratories are cautioned against overinterpretation. A positive drug test does not necessarily indicate impairment at the time of injury, and a negative result does not rule out intoxication. For lab professionals, this reinforces the importance of educating ED clinicians on test limitations, particularly detection windows and assay cross-reactivity.
Test menu design is a central operational issue. Strongly recommended assays for all EDs include opioids and opiates—specifically fentanyl and oxycodone—along with benzodiazepines, amphetamine-type stimulants, and cocaine. Despite decades of opioid-related morbidity and mortality, proficiency testing data show many laboratories have been slow to add fentanyl testing, which is not detected by traditional opiate immunoassays. Some states now mandate fentanyl inclusion, signaling a broader trend toward regulatory pressure as drug use patterns evolve. The guideline from ADLM recommends adding fentanyl to the test menu if the lab supports an ED.
Streamlining Panels and Specimens: Focusing ED Drug Testing on What Matters Most
At the same time, laboratories are encouraged through ADLM’s new guidance to remove assays with minimal clinical utility, such as propoxyphene and tricyclic antidepressants, which are prone to false positives and reflect outdated prescribing patterns. Testing for emerging drugs, toxic adulterants like xylazine, or novel psychoactive substances is generally not recommended due to rapidly shifting prevalence and limited impact on ED management.
The inclusion of tetrahydrocannabinol (THC) and its metabolites in ED drug testing remains debated, according to the guidance. Challenges include “evolving laws for drug scheduling, legalization or decriminalization of recreational use, and provisions for regulated medicinal use,” as well as increasing use of products containing other cannabinoids like CBD or delta-8-THC. A positive THC result can occur in patients using CBD products “due to the presence of THC in the preparation.” Overall, cannabinoid testing “provides limited clinically actionable information in the ED, except in specific populations such as pediatrics.”
Evidence shows that most studies “reported increased cannabinoid-related poisonings post-legalization, particularly in children.” THC use is also associated with conditions prompting ED visits, including “cannabinoid hyperemesis, psychosis, and trauma,” though providers should note that “THC metabolites can be detected in urine long after last use.” While some research has found negative outcomes such as “increased mortality or need for mechanical ventilation after trauma,” findings are inconsistent. Legalization appears to influence testing practices, as studies show “increasing rates of positivity as legalization progressed,” and drug test results may affect healthcare utilization, with one Canadian study reporting “fewer ED orders for imaging and laboratory testing, and increased use of observation units in THC screen-positive patients.”
The laboratory should “be aware of local and national regulations when designing panels” and provide flexible options, such as “separate drug panels with and without THC, and/or having THC as a standalone orderable test.”
Urine remains the preferred testing matrix due to availability and ease of use, though oral fluid testing offers potential advantages in witnessed collection and shorter detection windows. Blood-based testing is rarely useful for acute care outside of ethanol but retains value for epidemiological and forensic analysis. Specialized matrices, such as meconium or umbilical cord tissue, continue to play a role in newborn drug exposure assessment.
Overall, the guidance calls on laboratory leaders to move beyond passive test provision. Collaboration with EDs, regular review of test menus, provider education, and alignment with local drug trends are essential to ensuring drug testing supports patient care without adding unnecessary cost or complexity to emergency services.
This article was created with the assistance of Generative AI and has undergone editorial review before publishing.
