Genetic test fraud crackdown raises compliance burden for U.S. labs
WASHINGTON, UNITED STATES — The United States government’s crackdown on genetic test fraud is putting new administrative and compliance pressures on laboratories, hospitals, and clinics. This regulatory shift is prompting many providers to consider outsourced back-office solutions to manage the load while maintaining access to advanced diagnostics.
According to a report from Healthcare Dive, the Centers for Medicare & Medicaid Services (CMS) recently requested public feedback on regulatory changes aimed at stopping fraudulent lab testing, including genetic and molecular diagnostics.
Genetic testing fraud: New CMS compliance pressures
Genetic testing has surged over the past two decades, but it has also become a target for fraud schemes that exploit Medicare beneficiaries.
“There have been a number of cases where people were getting little old ladies to let them do a cheek swab at a health fair or at a nursing home and running genetic tests and never even necessarily giving them the results,” said Danielle Sloane of Bass, Berry and Sims.
Past investigations led to charges against dozens of individuals accused of billing Medicare billions of dollars for unnecessary tests.
The CMS’s request for information (RFI) seeks input on new regulatory tools, data analytics, and methods to strengthen program integrity.
The agency has already taken measures, including a six-month moratorium on enrollment of new durable medical equipment providers and a pause on $259.5 million in Medicaid payments to Minnesota linked to questionable claims.
“Fraudulent actors harm patients, waste taxpayer dollars, and undermine trust in legitimate health care services,” said Susan Van Meter, president of the American Clinical Laboratory Association.
The ACLA is currently examining the RFI document in which they intend to submit their feedback about effective strategies that safeguard patients while maintaining essential laboratory services.
Leveraging outsourced back-office teams for lab compliance
These incoming compliance requirements will create resource challenges for health systems, hospitals, and clinics. Smaller laboratories lacking dedicated regulatory personnel are expected to feel the heaviest impact.
Outsourced back-office teams offer specialized support services that assist providers in their claims review process, data validation tasks, and audit readiness efforts while they deal with regulatory changes efficiently.
“These precision diagnostics are the foundation of personalized medicine, providing clinicians with the critical information needed to ensure patients receive the right care at the right time,” Van Meter noted.
By leveraging external expertise, providers can expand their advanced testing services while maintaining regulatory compliance and minimizing expensive fraud-related penalties.
The growing market need for back-office support aligns with surging Medicare expenses for these diagnostics. Recent federal data reveal that while genetic tests account for a staggering 43% of total Medicare Part B laboratory spending, they represent just 5% of total test volume.
Providers that integrate outsourcing solutions may find it easier to meet compliance expectations while sustaining access to cutting-edge diagnostics for patients.
