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.
Ten children have already been diagnosed with cancer; 13 others carry gene requiring lifelong testing
Shocking news about a single sperm donor’s shared gene mutation has shed light on shortfalls in preventative clinical laboratory genetic screening.
The otherwise-healthy donor’s sperm has already led to various cancer diagnoses for 10 of the children he fathered, including Hodgkin lymphoma and brain tumors, CNN reported.
“Unlike in some cases of serial sperm donors, such as a Dutch man who was ordered to stop donating sperm after being found to have fathered between 500 and 600 children around the world, this man only donated to a single private sperm bank in Denmark named the European Sperm Bank,” CNN reported.
Though it may be an anomaly, this occurrence has generated calls for increased regulation on the use of donated sperm.
“At the heart of the problem seems to lie the regulation, or maybe the lack of regulation, of the number of births by a single donor,” said Edwige Kasper, PhD, oncogenetic biologist at Rouen University Hospital in France, at the annual conference of the European Society of Human Genetics in Milan, Italy, CNN reported. (Photo copyright: LinkedIn.)
Limits to Genetic Screening
“Preventative genetic screening is reaching its limits here,” Julie Paulli Budtz, vice-president of corporate communications at the European Sperm Bank, told CNN. Budtz noted that in this case, the donor was tested even above traditional standards.
“Every human being has about 20,000 genes, and it is scientifically simply not possible to detect disease-causing mutations in a person’s gene pool if you don’t know what you are looking for,” she told CNN.
At least in this situation, the need for improvement is evident and will likely inspire continued research and development in the genetic testing capabilities.
“The fact that the case in point is very rare does not mean that it will not reoccur,” Kasper noted in the ESHG press release.
Calls for Increased Regulation of Sperm Donations
At the European Society of Human Genetics (ESHG) annual conference in May, Edwige Kasper, PhD, an oncogenetic biologist and specialist in genetic predisposition to cancer at Rouen University Hospital in France, explained how one European man’s sperm donations spanning from 2008-2015 resulted in the birth of 67 children, 23 of whom have already been impacted by his cancer-causing genetic mutation, CNN reported.
“We need proper regulation at European level to try to prevent it happening again, and to implement measures to ensure a worldwide limit on the number of offspring conceived from the same donor,” she noted.
ESHG’s press release describes Li-Fraumeni as “one of the most severe inherited predispositions to cancer that is characterized by a broad spectrum of tumors at an early age.”
Additional Case Details
In addition to the 10 children with cancer diagnoses, another 13 he fathered are currently cancer-free but carry the gene, which now subjects them to invasive life-long testing including whole-body MRI scans to clinical exams and scans of the brain, breast, and abdomen, CNN noted.
“[The procedure is] heavy and stressful for carriers, but we have seen its effectiveness in that it has enabled early detection of tumors and thus improved patients’ chances of survival,” Kasper said in the ESHG press release.
The offspring of these 10 children will have a 50% greater chance of receiving the gene as well, CNN added.
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.
