By JULIE EGGINGTON, EKATERINA CLEARY and LEEZA OSIPENKO
When CMS issued its Request for Information under the Comprehensive Regulations to Discover Suspicious Medical Care (CRUSH) in February, focused on a long-standing problem: fraud, waste and abuse in laboratory testing, especially genetic and molecular diagnostics.
The laboratory industry will respond. And when you do, your arguments will sound polished, familiar, and deeply reassuring. They will also be fake or unproven.
If policymakers want this effort to succeed, they must be prepared to handle three claims that have long shielded problematic practices from meaningful oversight.
Claim 1: Fraud, waste and abuse are limited to a few bad actors
Expect labs to argue that fraud, waste and abuse are rare, isolated and already addressed through law enforcement actions. The narrative will feature a handful of atrocious casespresented as outliers in an otherwise reliable ecosystem.
But the problem is not a few bad apples. It is the design of the garden.
Take “code stacking,” in which laboratories bill for multiple individual genetic testing codes instead of a single panel code, often inflating reimbursement. In an analysisLaboratories used between 1 and 12 billing codes for hereditary cancer panels with the same testing indications, with average estimated charges ranging from $679 to $8,589 for apparently comparable tests. The repetition of these behaviors across companies suggests systemic incentives, not isolated misconduct.
Extensive Medicare billing data, whistleblower casesand Department of Justice The settlements aim to patternsno anomalies: large-volume genetic panels ordered with little clinical justification, molecular pathology tests billed under Grab bag and overly permissive billing codesand aggressive marketing and patient collection practices aimed at vulnerable populations.
A key factor is opacity. Many laboratory developed tests (LDTs) are marketed under similar or identical names despite significant differences in design, accuracy and intended use. To a doctor or a payer, they seem interchangeable. Actually, they are not.
This naming ambiguity allows lower-quality tests to follow the lead of better-validated ones, while still requiring reimbursement. Fraud, in this context, is not always a dramatic act. It is often integrated into routine billing.
Claim 2: Precision medicine advanced by genetics is worthwhile because of better patient outcomes
The second argument will appeal to aspiration. The labs will emphasize that genetic testing is the backbone of precision medicine and therefore a worthwhile investment for CMS, despite rising costs.
Laboratory lobbyists and industry groups will use the “era of precision medicine” argument to justify the fact that genetic testing now costs Medicare almost as much as all other outpatient laboratory tests combined. In the most recent analysis of 2024 Medicare DataGenetic testing accounted for 43% ($3.6 billion) of total Medicare outpatient laboratory spending, despite representing only 5% of all Medicare outpatient laboratory tests performed.
There is some truth to the value of genetic testing. Selected genetic tests have demonstrated clear clinical utility, improving diagnosis or guiding treatment that has resulted in life extension.
But the jump from “some” tests that lead to better patient outcomes to “most” tests that lead to better patient outcomes is where the argument breaks down.
The evidence base for many commercialized genetic and molecular tests. remains thin, heterogeneous or completely absent. Clinical utility, in the rare cases where it has been demonstrated by users or the test developer, often extends like a halo over other tests from different laboratories that offer similarly marketed tests. While untested metoo tests share functional markings and billing codes with the tested test, they often differ in methodology or performance in a non-transparent manner. In summary, due to inherent differences in methodologies, me-too tests may not improve patient outcomes as effectively as the tested test, or may not improve at all.
This is not precision medicine. It is a scale approximation.
For policymakers, the distinction is important. Without evidence that a test informs clinical decisions in a way that improves health, its value to Medicare and Medicaid remains to be demonstrated.
If laboratories want to claim that their tests save or improve lives, they must demonstrate this for each different test, whether they are market-leading tests or me-too tests.
Claim 3: Laboratory oversight slows innovation at the expense of lives saved
Finally, expect labs to issue a warning: Tighter oversight of labs’ billing and patient recruitment practices will slow innovation, delay access to cutting-edge diagnostics, and ultimately harm patients.
This argument is based on a critical assumption that has not been established, namely that the current volume and acceleration of laboratory testing related to precision medicine is generating life-saving benefits on a large scale.
In many cases, that evidence does not exist, or the opposite exists.
Innovation in healthcare is defined not by the number of tests doctors order for patients, or the increasing complexity and cost of molecular pathology testing, but by its impact on patient outcomes. Requiring that the right patients receive the right tests (which have been shown to be useful), at the right time, does not inherently stifle innovation; Helps distinguish between significant progress and noise.
Well documented Efforts by some genetics laboratories to recruit as many patients as possible result in diluting the true value of genetic testing. Even if, for example, a cancer genetic testing laboratory has a test with proven clinical utility for patients with certain cancers, testing patients without the relevant cancers would dilute its measurable clinical utility. And because of false positive diagnoses, testing inappropriately recruited patients could ultimately harm more patients than the test helps.
Furthermore, the absence of billing rules can distort innovation. When reimbursement is available without strong evidence requirements, the market rewards proliferation over validation. Without oversight, high-quality tests must compete with lower-cost, lower-evidence alternatives that are marketed as equivalent or better than the tested tests.
Stricter oversight of laboratories’ patient recruitment and reimbursement claims would provide CMS the opportunity to ensure that precision medicine goals are achieved. It wouldn’t stop innovation. I would redirect it toward demonstrable value.
A way forward
If CMS wants to reduce fraud, waste and abuse in laboratory testing, it should focus less on going after individual bad actors – which is proving to be an endless game of whack-a-mole – and more on correcting structural weaknesses.
That starts with transparency. Tests that differ in design or performance should not share indistinguishable names in billing systems. Clear differentiation would make it more difficult for lower quality tests to be passed off as established tests.
It also requires evidentiary discipline. Coverage and reimbursement should be linked to demonstrated clinical utility at the trial level, not inferred from category-level evidence.
CRUSH RFI presents an opportunity to reset expectations. The laboratory industry will defend its arguments. CMS should be prepared to look beyond the familiar narratives and ask a simpler question: no if a test could advanced medicine, but yes does.
Julie Eggington is executive director of the Center for Genome Interpretation and founder of Grandview Consulting. Ekaterina Cleary is a data scientist and Leeza Osipenko is CEO of Consilium Scientific, where she leads the development of This post is part of her work at Evimetera quantitative framework for assessing the strength of clinical evidence supporting innovative medical devices and diagnostics, funded by Arnold Ventures.
