From 2018 to the present, there have been billions of dollars of genetic test fraud in Medicare Part B, the vast majority occuring from unscrupulous labs in Texas and Florida. MACs there allow pop up labs to bill $10M, $20M, or more in the highest-cost genetic test codes, with no controls before payment. In one documented case, the Florida MAC paid out huge amounts for obviously-impossible tests to a lab in one year, then stopped payment on those codes. The brilliant masterminds at the lab then billed tens of millions of dollars, the next year, on nearby genetic codes, unfairly evading the hard-working fraud experts at their MAC.
This doesn't happen at MolDx MACs nor the NGS MAC.
CMS announces plans for major new fraud efforts, and seeks public comment on them. Genetic test fraud is highlighted. Comment to March 30.
- Find the home page for the Federal Register publication here. Includes html text of the whole publication.
- See Section D. Reducing Medicare Fraud Related to Laboratory Tests Including Genetic Tests and Molecular Diagnostic Tests.
- See the Crushing Fraud home page at CMS here.
- In case I've been too subtle in this and prior blogs for several years, this genetic test fraud hasn't ever required geniuses and AI to catch. It could be detected by a ten-year old with Excel.
- "Mommy, why did this lab bill Medicare $25M last month for genes like Tay-Sachs and cystic fibrosis in 90 year old nursing home patients?"
- Using public CMS data, I've written about this in great detail since 2020, six years ago - here.
- See a broad press release from CMS here.
- See an article at Fierce Healthcare here.
In 2011, the Molecular Diagnostic Services Program (MolDX Program), administered by Palmetto GBA on behalf of CMS, was established to determine and streamline coverage and reimbursement for molecular diagnostic tests on behalf of the Medicare program. It aims to provide uniform policies across multiple Medicare Administrative Contractors (MACs) and currently spans 28 states.CMS is interested in understanding if a requirement to register in the MolDX program, that other payors may have, has had an impact on the risk of fraud, waste and abuse related to laboratory testing. CMS also wants to understand the rationale as to why other payors and MA organizations require laboratories to be registered in MolDX even when they are not located in a MolDX state.
- What prompted other payors and MA organizations to require registration in the MolDX program?
- What safeguards or challenges has the MolDX program provided to your organization regarding laboratory testing?
CMS “CRUSH Fraud” RFI —
What It Signals for Labs and Genetic Testing
On February 20, 2026, CMS released its “CRUSH Fraud” Request for Information, signaling a major escalation in program integrity efforts focused in part on laboratory testing, including genetic and molecular diagnostic tests. CMS notes that Medicare Part B spending on lab tests reached $8.4 billion in 2024 and that genetic tests, while a small percentage of total test volume, accounted for a disproportionately large share of spending.
The agency explicitly references prior DOJ and OIG enforcement actions involving genetic testing fraud and highlights the work of its Fraud Defense Operations Center (FDOC), which accelerated payment suspensions in 2025, including actions involving suspect laboratories.
The document is not a pricing proposal and does not address coverage standards. Instead, it centers on expanding CMS’s program integrity authorities and operational tools.
Strengthened Fraud Detection and Payment Suspension
CMS asks whether it should modify enrollment, audit, medical review, and payment suspension authorities to act more quickly against suspected fraud. The RFI signals interest in stronger use of data analytics, automated claims edits, and faster suspension mechanisms where there are credible fraud indicators.
CMS is also exploring whether shorter claim filing deadlines (for example, 90–180 days instead of one year) might be appropriate for high-risk services. Although no services are specified, laboratory testing is clearly identified as a concern area.
The tone suggests a shift toward earlier intervention and more aggressive prepayment safeguards rather than post-payment “pay-and-chase.”
Possible Expansion of MolDX-Related Requirements
CMS specifically asks whether requiring laboratories to register in the MolDX program has had an impact on fraud, and why Medicare Advantage plans or other payers sometimes require MolDX registration even when laboratories are not located in MolDX states.
This line of questioning suggests CMS is evaluating whether MolDX registration and related safeguards function as effective program integrity tools.
The RFI does not directly propose nationalization of MolDX, but it clearly signals interest in understanding whether such registration requirements mitigate fraud risk.
Enhanced Ownership and Identity Proofing
The RFI raises concerns about opaque ownership structures and foreign-linked fraud schemes. CMS asks whether it should require U.S. citizenship or permanent residency for individuals with ownership stakes of 5 percent or more, expand fingerprinting and background checks, or enhance identity verification processes more broadly.
For laboratories, this signals possible tightening of enrollment scrutiny and ownership transparency requirements, particularly in high-risk categories.
Medicare Advantage and Part D Oversight
CMS notes that it currently lacks explicit regulatory authority to direct Medicare Advantage (MA) and Part D sponsors to suspend payments under circumstances similar to Traditional Medicare. The agency asks whether such authority should be established.
If pursued, this could align MA and Part D fraud oversight more closely with Traditional Medicare and reduce opportunities for providers revoked in fee-for-service Medicare to continue billing in MA environments.
Artificial Intelligence and Advanced Analytics
CMS is seeking input on how artificial intelligence could improve claims review, coding oversight, and fraud detection. The emphasis is on improving efficiency and accuracy in identifying overpayments and suspicious billing patterns.
For laboratories, this signals continued investment in data-driven surveillance tools.
What This RFI Is Really About
The CRUSH RFI is fundamentally about expanding CMS’s fraud prevention and enforcement authority, not about revising coverage policy or recalibrating laboratory pricing. Laboratory testing — particularly genetic and molecular diagnostics — is explicitly identified as an area of concern because of its high spending concentration and documented enforcement history.
The overarching direction is toward:
Faster fraud detection
Expanded enrollment and ownership scrutiny
Stronger prepayment controls
Greater alignment of MA oversight with Traditional Medicare
Increased use of analytics and AI
For legitimate laboratories, the central theme is operational compliance and transparency. The document signals that CMS intends to strengthen its fraud control infrastructure, and laboratory stakeholders should anticipate a more intensive program integrity environment in the coming rulemaking cycle.
