Laboratory Economics: CMS Signals Increased Focus on Genetic Testing
The following timely article is reprinted with permission from Laboratory Economics, Jondavid Klipp, editor. We thank him for granting us the right to share valuable insights on this vital topic. Learn more about Laboratory Economics at www.laboratoryeconomics.com
A recent request for information (RFI) issued by the Centers for Medicare and Medicaid Services (CMS) seems to signal a major escalation in program integrity efforts focused in part on laboratory testing, including genetic and molecular diagnostic tests.
In its “CRUSH Fraud” RFI issued Feb. 20, 2026, CMS notes that Medicare Part B spending on lab tests reached $8.4 billion in 2024 and that genetic testing and molecular diagnostics, while a small percentage of total test volume, accounted for a disproportionately large share of spending. According to CMS, although genetic tests and molecular diagnostics represented only 5% of lab tests paid under Part B in 2024, they accounted for 43% ($3.6 billion) of Part B lab spending.
In the RFI, CMS asked what new statutory or regulatory authorities would empower CMS to more effectively prevent, identify and address fraud in lab tests, including genetic and molecular diagnostic tests. The agency also asks what types of tools, data analytics and methods would assist CMS in increasing program integrity related to lab tests, including genetic and molecular diagnostic tests.
Bruce Quinn, MD, PhD, Principal of Bruce Quinn Associates LLC (Los Angeles), tells Laboratory Economics that CMS is quite aware that much of the expansion in genetic testing payment comes from a few codes (81408, rare gene sequencing;81419, epilepsy panels; 87798, other pathogen by PCR).
“These codes are almost never billed by major national reference labs, but often by labs that pop up in Texas and Florida,” he says. “CMS is fully aware that billing is minimal on these codes in MolDX states or in the NGS-MAC states. CMS devotes several paragraphs to asking whether required enrollment in MolDX would curb unnecessary or dubious claims.”
In fact, in regard to the MolDX (Molecular Diagnostic Services) Program, CMS states that it is interested in understanding if a requirement to register in the MolDX program has had an impact on the risk of fraud, waste and abuse related to lab testing. CMS also wants to understand why other payors and Medicare Advantage plans require labs to be registered in MolDX even when they are not located in a MolDX state.
Clarisa Blattner, Senior Director, Revenue and Payor Optimization for XiFin (San Diego), notes that from a program integrity standpoint, test-level identification can help reduce billing opacity and improve policy consistency.
“Some Medicare Advantage plans and commercial payors have adopted MolDX registration requirements even outside MolDX jurisdictions because it improves their ability to understand what test is actually being billed and apply coverage policies more consistently,” she says.
MolDX registry provides a mechanism for identifying the specific test performed,but test-level identifiers are only one component of a larger program integrity framework, Blattner says. The RFI suggests that CMS is interested in whether test-level identification
mechanisms could improve transparency and program integrity for molecular diagnostics but does not necessarily signal that CMS intends to nationalize MolDX.
“The overall direction CMS is signaling is a shift away from the traditional ‘pay-and-chase’ model toward earlier detection and intervention,” says Blattner, noting that many payors are beginning to incorporate artificial intelligence to help identify irregular billing patterns.