Clinical laboratories should use this situation as an opportunity to ask questions about their own data privacy approaches
While the drama surrounding 23andMe’s bankruptcy announcement has taken the spotlight—cofounder Anne Wojcicki resigned as CEO so that she can attempt to be the top bidder for the company in bankruptcy court—the more interesting long-term debate for clinical laboratories may be about genetic data privacy.
The 20-year-old direct-to-consumer genetic testing company stated in an investor news release on March 23 that it would enter bankruptcy to get a better handle on operational and financial challenges.
In a post on LinkedIn, Wojcicki wrote, “If I am fortunate enough to secure the company’s assets through the restructuring process, I remain committed to our long-term vision of being a global leader in genetics and establishing genetics as a fundamental part of healthcare ecosystems worldwide.”
Wojcicki also heralded the 15 million people who sent in their samples and became customers. Many of them also agreed to clinical research based on those submissions. “What made so many of our innovations possible were the 85% of our customers who opted in to research,” she wrote.
“I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder,” said Anne Wojcicki (above), cofounder of 23andMe, wrote on LinkedIn. It remains to be seen how 23andMe’s bankruptcy will affect clinical laboratories. (Photo copyright: Wikimedia Commons.)
Customer Data Can Be Sold as an Asset During Bankruptcy
Those samples now find themselves in a murky area involving genetic data privacy. Will a court allow creditors to acquire that data as an asset to satisfy 23andMe’s financial obligations? And will people who gave samples to a company they presumably trusted be happy if that information ends up in other hands?
“Comprehensive data privacy legislation has been enacted across the United States and globally, including the California Consumer Privacy Act of 2018 and the European Union’s General Data Protection Regulation,” the Harvard Law Review noted in a March 2025 story about data assets during bankruptcy. “With this development has come a renewed focus on data privacy in bankruptcy, where a debtor is likely to sell its customer data to pay its debts.”
In fact, California Attorney General Rob Bonta, JD, urged residents in that state to consider the California law’s options in light of the bankruptcy announcement. “I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company,” Bonta said in a statement.
The Harvard Law Review noted that federal law allows for the appointment of ombudsmen in bankruptcy cases to protect consumer data, but that approach “has been ineffective at meeting that goal.” There is no word at this early stage whether the 23andMe bankruptcy will involve an ombudsman.
How Did 23andMe End Up in Bankruptcy?
Business models and criminals helped push the once thriving 23andMe to the point of bankruptcy. The company in 2021 had a $6 billion market cap. As of close of business on March 24, 2025, the cap hovered just over $20 million.
One long-term issue: There was often no need for anyone to be a repeat customer of 23andMe once they purchased their initial direct-to-consumer genetic test. “It didn’t really have a continuing business model—once you’d paid for your DNA report, there was very little for you to return for,” the BBC reported on Nov. 2.
Clinical labs are clearly in a better position here, as in addition to one-off genetic tests, they offer many medical assays that need to happen dozens or more times over a patient’s life.
Also, 23andMe had a difficult time gaining momentum for its anonymized DNA database that clinical researchers could use, according to the BBC.
A year later, 23andMe agreed to pay $30 million to settle a lawsuit over the stolen data, Reuters reported. The hack accessed information for 6.9 million customers.
Clinical Laboratories Must Be Wary of Genetic Data Privacy
It’s not hard to imagine clinical laboratories that perform genetic testing finding themselves in a situation similar to 23andMe with genetic data privacy on the line because of a business transaction. Some clinical laboratories do go bankrupt, but a more common occurrence is for a lab to be bought out by a competitor or one of the large national laboratory companies.
Clinical lab leaders may want to ask themselves these questions about genetic data privacy:
If a lab’s genetic testing information changed owners, would that damage parties’ reputation in the community?
Is there a triage plan in place to deal with any customers who want their data erased prior to any acquisition or merger?
Watch for in-depth analysis about the implications to clinical labs from the 23andMe bankruptcy in an upcoming issue of The Dark Report. Not a subscriber? Try a 14-day free trial today.
Requirement reflects increasing worldwide focus on preventing genetic disorders through clinical laboratory genetic testing
In a significant move, Abu Dhabi’s Department of Health has established a new policy that requires engaged couples to get genetic testing done along with clinical laboratory blood testing before walking down the aisle.
Abu Dhabi, the capital city of the United Arab Emirates (UAE), is following an established public health policy of testing soon-to-be-married couples for specific disease conditions. Now, however, instead of just infectious diseases, it is testing for specific genetic conditions as well.
This marks a first for Arab nations and also demonstrates a shift in the standard of care for those regions.
“Abu Dhabi continues to set a global standard in proactive healthcare, marking a significant paradigm shift from traditional and reactive healthcare to informed and holistic health planning and decisions,” said Asma Al Mannaei, DrPH, Director of Health Quality and Executive Director of the Research and Innovation Center at Abu Dhabi Department of Health (DOH), in a press release.
Clinical laboratory managers and pathologists in the US will note that the move in Abu Dhabi mirrors a similar trend in this country. A growing number of children’s hospitals are using genetic testing such as rWGS (Rapid Whole Genome Sequencing) as a pro-active screen for newborns where family history indicates the value of such testing.
It appears the use of genetic testing as a way of predicting risk for genetic disorders is growing in popularity across the globe.
“The integration of genetic testing as part of the premarital screening program is a proud milestone for Abu Dhabi. It positions the Emirate at the forefront of leading healthcare destinations globally, harnessing the power of genomics and latest technologies to promote informed decisions,” said Asma Al Mannaei, DrPH (above), executive director of the Research and Innovation Center at Abu Dhabi’s Department of Health, in a press release. “This step aims to prevent the transmission of genetic diseases to children and elevate early intervention through different phases including diagnostic, tailored genetic counselling, and introducing reproductive medicine solutions for couples.” (Photo copyright: Global Medical Tourism Summit.)
Why Screen for Genetic Disorders?
Pre-screening betrothed couples isn’t a new concept. The US previously required blood tests prior to marriage primarily to spot diseases such as Rubella (a.k.a., German Measles). The nationwide program was eliminated in 2019 for a variety of reasons including the fact that “the mandated blood tests worked to discourage marriage while doing little to actually identify people with disease or improve public health,” the Mises Institute noted at the time.
However, things are different in Middle East nations where consanguinity—when a couple shares a blood relative—is a common cultural norm. It’s not unusual in those regions for first cousins to marry and have children, which can lead to genetic complications.
“If a couple are consanguineous (related) their children have a higher chance of being affected by autosomal recessive genetic disorders. These only occur if a child has a mutation (change) in both copies of a particular gene pair,” according to Top Doctors.
This is where Abu Dhabi’s new genetic testing requirement comes in.
Making Informed Decisions for Future Families
Just like in the US, Abu Dhabians have been blood screening couples for infectious diseases for decades. Genetic testing as part of premarital screening was added at the end of 2024, a report from the Abu Dhabi Public Health Center (ADPHC) noted.
Screening is available at 22 primary healthcare centers throughout Abu Dhabi and the Al Dhafra and Al Ain regions.
“The comprehensive genetic testing list includes 570 genes that cover 840+ genetic disorders. It is important because it can help couples assess the risk of having children with genetic disorders and support them in making informed decisions about family planning,” the ADPHC stated in its report.
Dark Daily in the Middle East
It seems inevitable that in time genetic testing for engaged couples would eventually become a requirement.
Abu Dhabi’s DOH partnered with Abu Dhabi Public Health Center (ADPHC) to launch a pilot of the genetic testing program back in 2022. It screened more than 800 couples and found that 86% showing “genetic compatibility.” The other 14% received test results that required them to obtain more advanced family planning and intervention, the ADPHC reported.
As consanguinity is a common practice in many areas of the Middle East, other nations and Emirates may follow Abu Dhabi in requiring couples to undergo genetic testing. In the US, it would be prudent for clinical laboratories to watch growing trends as more couples opt for extra testing to provide best possible outcomes for their future families.
The CDC suggests that hospitals treating patients for flu symptoms perform clinical laboratory tests for avian influenza A within 24 hours. This additional testing will pinpoint the specific type of flu infecting an individual patient and help prevent further spread of the bird flu virus.
“It’s the subtyping that takes us from knowing that a virus is in the general bucket of ‘influenza A’ to knowing more specifically whether it’s a garden-variety seasonal version of influenza A or, more rarely, a novel version of influenza A like H5N1,” CDC Principal Deputy Director Nirav Shah, MD, JD, told CNN.
According to the CDC, a panzootic of pathogenic avian H5N1 flu virus is currently affecting wild birds, poultry, dairy cows, and other animals throughout the country. There have been 67 total cases of bird flu identified in humans in the US since 2022, with 66 of those cases occurring in 2024.
The risk of humans contracting bird flu are low but is elevated among those who work closely with wild birds, poultry, and dairy cattle. The incidences of the flu virus in animals continues to increase, so CDC says it is important to identify potential bird flu cases in humans in a timely manner.
This demonstrates recognition by the CDC and the clinical laboratory profession that advances in molecular diagnostics and genetic testing now make it feasible for many hospital labs to perform these tests in-house on relevant patients. Such molecular testing is less expensive and produces a faster answer today, compared to just a few years ago.
This call for more lab tests in hospitals is also recognition of the value near-patient testing has from a public health perspective. Historically, it was regional and local public health labs that were sent specimens for testing from patients identified as having an infection that were a public health concern.
The good news is that this expands the role of hospital laboratories for all the right reasons. The downside is that hospital labs will probably see many test claims for these assays not be paid promptly by payers—or paid after unnecessary delays.
“The system right now tells us what has already happened. What we need is to shift to a system that tells us what’s happening in the moment. That is what we are doing today,” Nirav Shah, MD, JD (above), CDC principal deputy told CNN. Hospital and clinical laboratories will likely see an increase in orders for molecular and genetic testing for influenza A. (Photo copyright: Centers for Disease Control and Prevention.)
CDC Recommendations to Clinical Laboratories
The CDC alert also acknowledges that most individuals infected with avian flu were exposed to the virus via the handling of infected dairy cows or poultry in unprotected workplaces. There are no known cases of human-to-human transmission of the disease.
Most cases of avian flu in humans have been clinically mild and the patients quickly recover. However, on January 6, the CDC announced that an elderly patient with underlying health conditions in Louisiana who was previously hospitalized with severe avian influenza A illness had passed away. This case was the first confirmed death in the US attributed to the illness.
The CDC’s Health Advisory makes the following recommendations to clinical laboratories:
Subtype respiratory specimens that are positive for influenza A, but negative for seasonal influenza A virus subtypes, and forward those specimens to a public health laboratory within 24 hours.
Refrain from batching specimens for consolidated or bulk shipment to public health laboratories if that process could result in shipping delays.
Notify public health officials if a hospital or clinical lab does not have access to influenza A virus subtyping and arrange for a public health or commercial lab with this testing capability to perform the analysis.
Clearly link specimens to clinical information from the patient to ensure the prioritization of severely ill and ICU patients.
Immediately contact local public health authority if a positive result for influenza A (H5) virus is obtained using a laboratory developed test (LDT) or another A (H5) subtyping test to initiate time-critical actions.
The CDC’s Health Advisory also states public health laboratories should complete influenza A subtyping assays within 24 hours of receipt and report those results to the CDC, as required.
“One of the motivators of accelerating testing [is] so that we are, again, able to faster see difference between signal and noise, given that the volume of hospitalizations is going up as expected in a rather routine flu season,” Demetre Daskalakis, MD, MPH, director of the CDC’s National Center for Immunization and Respiratory Diseases (NCIRD), told CNN.
Preparing for more Bird Flu in Humans
According to the CDC, approximately 100,000 Americans have been hospitalized with type-A flu this season. The agency expects another 100,000 hospitalizations due to the virus before the end of this year. CDC is tracking flu infections on a weekly basis. Data can be reviewed on its website.
Other government organizations also are developing methods intended to curb the spread of the influenza virus. The federal Department of Agriculture recently launched a national program to test for bird flu in untreated milk. And the US Department of Health and Human Services (HHS) allocated $211 million in new funding to address emerging infectious diseases.
On January 17, the HHS announced it would give $590 million to Moderna to “accelerate the development of mRNA-based pandemic influenza vaccines and enhance mRNA platform capabilities so that the US is better prepared to respond to other emerging infectious diseases.”
“The funding will allow us to bring the benefits of mRNA vaccine technology to bear against a wider array of emerging threats,” said HHS Assistant Secretary for Preparedness and Response Dawn O’Connell, JD, in the announcement. “mRNA technology can be faster to develop and easier to update than other vaccines making it a helpful tool to have against viruses that move fast and mutate quickly.
Hospital laboratories and public health labs should prepare for a spike in test orders for avian influenza A as this year’s flu season progresses. As bird flu increases in animals, it increases the possibility that the disease might infect humans.
Clinical laboratory executives and pathology leaders may want to develop strategies for supporting the growing numbers of at-home screening and diagnostic test users
Findings of a national poll conducted by the University of Michigan (U-M) exploring consumers’ purchases suggests seniors are becoming more comfortable with ordering and using at-home medical testing. Their choice of tests and opinions may be of interest to clinical laboratory executives, pathologists, and primary care physicians considering programs to support self-test purchasers.
The researchers found that 48% of adults, ages 50 to 80, purchased at least one at-home medical test, and that 91% of the buyers indicated intentions to purchase another test in the future, according to a U-M news release.
In their paper, they note that “validity, reliability, and utility of at-home tests is often uncertain.” Further, understanding and responding to test results—especially since caregivers may not have ordered them—could lead to “a range of unintended consequences,” they wrote.
“As a primary care doctor, I would want to know why my patient chose to take an at-home test that I didn’t order for them. We also need to understand in greater detail why folks use at-home tests instead of traditional means, beyond convenience,” said the U-M study’s lead author Joshua Rager, MD, a research scientist at William M. Tierney Center for Health Services Research at Regenstrief Institute, who is now an assistant professor of medicine, Indiana University, in a news release. The findings of the U-M study will be of interest to clinical laboratory executives and pathology leaders. (Photo copyright: Regenstrief Institute.)
Free COVID-19 Tests Ignite At-Home Testing
In their Journal of Health Care paper, the U-M researchers speculate that curiosity in at-home testing may have been propelled by the offer of free COVID-19 tests by the US government starting in 2021 during the pandemic.
They also noted the different ways at-home test kits are performed by healthcare consumers. Some, such as COVID-19 rapid antigen tests, return results to users in a few moments similar to pregnancy tests. Others involve self-collecting specimens, such as a stool sample, then sending the specimen to a clinical laboratory for analysis and results reporting to physicians.
Of those older adults who participated in U-M’s National Poll on Healthy Aging study, the following bought at-home medical tests online or from pharmacies and supermarkets, according to U-M’s paper:
As to perceptions of at-home medical testing by users, when polled on their test experience, the surveyed seniors reported the following:
75.1% perceived at-home medical tests to be more convenient than conventional medical tests.
59.9% believe the tests “can be trusted to give reliable results.”
54.8% believe the tests “are regulated by government.”
66% called them a “good value.”
93.6% indicated results “should be discussed with my doctor.”
Inconsistency in how people shared test results with their healthcare providers was a concern voiced by the researchers.
“While nearly all patients who had bought an at-home cancer screening test shared the results with their primary care provider, only about half of those who tested for an infection other than COVID-19 had. This could have important clinical implications,” the researchers wrote in their paper.
Confusion over Government Regulation
The U-M study also revealed consumer misunderstanding about government regulation of at-home clinical laboratory tests purchased over-the-counter.
The US Food and Drug Administration (FDA) cleared “some diagnostic at-home tests for over-the counter use. But many tests on the market are unregulated or under-regulated,” the authors wrote, adding, “Our results suggest, however, that patients generally believe at-home tests are regulated by government, but a substantial minority did not, which may reflect public confusion in how at-home testing is regulated.”
Women, College-Educated Buy More At-Home Tests
Purchase of at-home tests varies among groups, as follows, the news release noted:
56% and 61% of older adults with a college degree or household income above $100,000, respectively, were “much more likely” to buy at-home tests than people in other income and education brackets.
87% of women would buy at-home tests again compared with 76% of men.
89% of college-educated people would purchase the tests again, compared with 78% of people with high school educations or less.
Future U-M research may explore consumers’ awareness/understanding concerning federal regulations of at-home testing, Rager noted.
“At-home tests could be used to address disparities in access to care. We hope these findings will inform regulators and policymakers and spark future research on this topic,” he said in the news release.
The U-M Institute for Healthcare Policy and Innovation survey results confirm that the country’s senior generations are becoming comfortable with at-home and self-testing options. As Dark Daily has previously suggested, clinical laboratories may want to develop service offerings and a strategy for supporting patients who want to perform their own lab tests at home.
Charges include $1.1 billion in alleged telemedicine and fraudulent clinical laboratory testing
Nearly 200 individuals in 25 states are facing charges for alleged participation in a variety of healthcare frauds, the US Department of Justice (DOJ) announced in a press release. This major enforcement action involves telemedicine and clinical laboratory testing as well as other healthcare schemes. In total, the DOJ is alleging the defendants are responsible for $2.75 billion in intended losses and $1.6 billion in actual losses.
The charges include:
$1.1 billion in alleged telemedicine and clinical laboratory fraud.
As part of the action, the government has seized more than $231 million in assets, including cash, luxury vehicles, and gold.
Monica Cooper, JD (above), a DOJ trial attorney and member of the Texas Strike Force, is one of two attorneys prosecuting the case against Harold Albert “Al” Knowles of Delray Beach, Fla., and Chantal Swart of Boca Raton, Fla., in the DOJ’s latest crackdown on healthcare fraud. Charges against Knowles and Swart include conspiracy to commit healthcare fraud, conspiracy to defraud the United States, and paying/receiving healthcare kickbacks in a $359 million scheme to bill Medicare for medically unnecessary genetic tests at two Houston clinical laboratories. (Photo copyright: US Department of Justice.)
Houston-Area Labs Charged in $359 Million Scheme
In one case, the government charged Florida residents Harold Albert “Al” Knowles and Chantal Swart in a $359 million scheme involving fraudulent Medicare billing for medically unnecessary genetic tests. Knowles owned two Houston-area labs—Bio Choice Laboratories, Inc. and Bios Scientific, LLC—while Swart ran a telemarketing operation. According to DOJ case summaries, the government alleges that Knowles paid kickbacks to Swart to obtain DNA samples and doctors’ orders for tests.
“Knowles, Swart, and others obtained access to tens of thousands of beneficiaries across the United States by targeting them with deceptive telemarketing campaigns,” the indictments allege. “Call center representatives—who were almost never medical professionals—often prompted beneficiaries to disclose their medical conditions and induced them to agree to genetic testing regardless of medical necessity.”
In addition, “Knowles, Swart, and others agreed that Swart and others would pay illegal kickbacks and bribes to purported telemedicine companies to obtain signed doctors’ orders for genetic testing after only a brief telemedicine visit,” the indictment stated. “Knowles and his co-conspirators knew that the purported telemedicine companies’ physicians were rarely, if ever, the beneficiaries’ treating physicians and rarely, if ever, used the genetic testing results in the beneficiaries’ treatment.”
Dallas-Area Labs Charged in $335 Million Scheme
In another case, the federal government charged that the owner of two Dallas-area clinical laboratories engaged in a $335 million Medicare billing scheme.
Keith Gray, owner of Axis Professional Labs, LLC and Kingdom Health Laboratory, LLC, “offered and paid kickbacks to marketers in exchange for their referral to Axis and Kingdom of Medicare beneficiaries’ DNA samples, personally identifiable information (including Medicare numbers), and signed doctors’ orders authorizing medically unnecessary cardio genetic testing,” the government alleged. “As part of the scheme, the marketers engaged other companies to solicit Medicare beneficiaries through telemarketing and to engage in ‘doctor chase,’ i.e., to obtain the identity of beneficiaries’ primary care physicians and pressure them to approve genetic testing orders for patients who purportedly had already been ‘qualified’ for the testing.”
Other Clinical Laboratory and Healthcare Fraud Cases
DOJ attorneys charged the owners of Innovative Genomics, a clinical laboratory in San Antonio, in a $65 million scheme to bill Medicare and the COVID-19 Uninsured Program for “medically unnecessary and otherwise non-reimbursable COVID-19 and genetic testing,” according to the indictment. Also charged were two patient recruiters who allegedly received kickbacks for referring patients.
Richard Abrazi of New York City was charged in a $60 million Medicare billing scheme. Abrazi owned two clinical laboratories: Enigma Management Corp. and Up Services Inc. Both operated as Alliance Laboratories.
“Abrazi and others engaged in a scheme to pay and receive kickbacks and bribes in exchange for laboratory tests, including genetic tests, that Enigma and Up billed to Medicare,” the indictment alleges. “Abrazi and others also allegedly paid and received kickbacks and bribes in exchange for arranging for the ordering of medically unnecessary genetic tests that were ineligible for Medicare reimbursement.”
The DOJ charged Brian Cotugno, of Auburn, Ga., and James Matthew Thorton “Bo” Potter, of Santa Rosa Beach, Fla., in a $20 million Medicare billing scheme. Cotugno, the indictment alleges, sold Medicare Beneficiary Identification Numbers (BINs) to two Alabama laboratories co-owned by Potter.
“The BINs were used to bill Medicare tens of millions of dollars for OTC COVID-19 test kits, many of which had not been requested by the beneficiaries,” the government alleged.
These are only a few of the recent cases the DOJ brought against defendants nationwide for healthcare, telemedicine, and clinical laboratory fraud. Both Dark Daily and our sister publication The Dark Report have covered these ongoing investigations for years. And we will continue to do so because it’s important that lab managers and pathology group leaders are aware of the lengths to which the DOJ is pursuing bad actors in healthcare.
