Genetic Testing Enforcement Poised to Rise: What to Expect in the Coming Year

On January 28, 2026, the U.S. Department of Health and Human Services Office of Inspector General (“HHS OIG”) released a report, “Total Medicare Part B Spending on Lab Tests Rose in 2024, Driven by Increased Spending on Genetic Tests” (the “Genetic Test Spending Report”). The Genetic Test Spending Report indicates that genetic testing is now central to Part B laboratory spending—a $600 million increase from 2023 to 2024, even while non-genetic testing reimbursements stayed flat in the same period. This shift is almost certain to lead to increased civil and criminal enforcement by HHS OIG and the Department of Justice over the next 12-24 months. For those who remember TRICARE’s rapid ascent of compound pharmacy reimbursement (and similarly rapid burst of enforcement), this is a familiar tale.

The data in the Genetic Test Spending Report shows a steep rise in Medicare-based reimbursement for genetic testing:

• In 2024, genetic testing was only 5% of all paid Part B lab test volume, but was 43% of total Part B lab reimbursement (roughly $3.6 billion total). Part B genetic testing reimbursement increased 20%  from 2023, and has nearly doubled since 2019.
• Genetic testing was the sole driver of Part B’s increased lab testing reimbursements in 2024, while non-genetic testing reimbursement stayed flat from 2023 (and remains at its lowest level since 2018).
• Overall, fewer Part B beneficiaries are receiving lab tests, with the number of enrollees receiving any lab test falling 15% from 2018 to 2024.
• Payment rates are not the driver—fee schedule rates have remained static since 2020.
• In 2024, 346 laboratories each received over $1 million in Part B payments for genetic tests, and 55 laboratories exceeded $10 million.
• Among 2024’s top 25 tests by spend, 10 were genetic, spanning cancer screening and pathogen detection—these 10 codes alone accounted for $1.5 billion in Part B reimbursement.
• Six of those 10 codes saw Part B spending jump by at least 30%, including CPT 87798, which was the single most reimbursed Part B code in 2024--$443 million (a 51% increase from 2023). 

Scrutiny of genetic testing by HHS OIG and DOJ has been building throughout the 2020s but is likely to reach a fever pitch with Medicare’s increased spending and reimbursement.

• In 2021, HHS OIG published a data brief indicating that genetic tests provided under Medicare Part B indicate an area of “possible concern.”
• In the 2024 National Health Care Fraud Takedown, DOJ charged 36 defendants in genetic testing telemedicine schemes exceeding $1.1 billion in alleged fraud.
• In the 2025 National Health Care Fraud Takedown, the DOJ announced charges against 49 defendants tied to more than $1.17 billion in alleged telemedicine and genetic testing fraud. 

With genetic tests comprising 43% of Part B lab spending in 2024, rising quickly in both utilization and per-enrollee cost, and more laboratories breaching seven- and eight-figure payment thresholds, everyone in the clinical laboratory industry from ordering providers to laboratories should be prepared for additional scrutiny. With many enforcement cases in recent years starting with simple RAC or UPIC audits by Medicare contractors like Qlarant (who then refer individuals and companies to HHS OIG and DOJ), laboratories should ensure their operations are in compliance now before the Government comes knocking.