Medicare Part B Lab Spending Hits $8.4 Billion as Genetic Testing Captures 43% of Dollars
•February 13, 2026
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Why It Matters
The shift concentrates Medicare dollars in molecular diagnostics, creating both revenue opportunities and heightened compliance risk for laboratories.
Key Takeaways
- •Genetic tests capture 43% of Part B lab spend.
- •Test volume rose 160% since 2018, reaching 18M.
- •Top 25 codes represent over $4.1B, half spending.
- •Per‑enrollee genetic test cost jumped 26% to $794.
- •Regulatory scrutiny intensifies as molecular diagnostics grow.
Pulse Analysis
Medicare Part B laboratory expenditures crossed the $8.4 billion threshold in 2024, marking a 5 % year‑over‑year increase. While routine chemistry and hematology panels still dominate test volume, they now account for less than 60 % of total spending. The real engine of growth is molecular diagnostics: genetic assays, representing only five percent of all Part B tests, absorbed 43 % of the dollar value. This shift reflects broader clinical adoption of precision medicine, expanded carrier‑screening programs, and the rising prevalence of oncology‑focused liquid biopsies, all of which command premium reimbursement rates. For clinical laboratories, the concentration of revenue in high‑priced genetic codes reshapes business models. Over 300 labs earned more than $1 million from Medicare genetic testing in 2024, and a handful surpassed the $10 million mark, underscoring the profitability of a focused molecular portfolio. However, the same data reveal a 12 % decline in non‑genetic test volume and a 15 % drop in overall Part B enrollee utilization, driven partly by migration to Medicare Advantage plans. Labs must therefore balance the lure of high‑margin assays with diversification strategies and vigilant compliance programs to mitigate audit risk. The OIG’s findings also signal policy implications. With the Clinical Laboratory Fee Schedule frozen since 2020, spending growth is being driven by utilization patterns rather than price hikes, prompting lawmakers to scrutinize the cost‑effectiveness of widespread genetic testing. Payers may respond with tighter medical‑necessity criteria or bundled payment models, while innovators continue to push down sequencing costs and expand test menus. Stakeholders that can demonstrate clinical value, manage documentation rigorously, and adapt to evolving reimbursement frameworks will be best positioned to capture the expanding share of Medicare lab dollars.
Medicare Part B Lab Spending Hits $8.4 Billion as Genetic Testing Captures 43% of Dollars
Genetic tests make up just 5% of volume but now drive 43% of Medicare Part B lab spending, according to OIG’s latest report.
Medicare Part B spending on clinical laboratory testing rose to $8.4 billion in 2024, a 5 % increase over the previous year, according to the Department of Health and Human Services’ Office of Inspector General (OIG). For laboratory professionals, the headline is not just rising spending—it’s where the money is flowing.
Although genetic tests accounted for only 5 % of all Part B tests performed in 2024, they represented 43 % of total lab spending—$3.6 billion. In contrast, the far larger volume of routine chemistry, hematology, and other non‑genetic tests generated $4.8 billion. Spending on non‑genetic testing has generally declined since 2021, while genetic‑testing expenditures climbed 20 % between 2023 and 2024 alone.
Utilization trends help explain the shift. The number of genetic tests paid under Part B increased 160 % between 2018 and 2024, reaching 18 million tests last year. Meanwhile, non‑genetic testing volume declined 12 % over the same period. More enrollees are receiving at least one genetic test per year, and per‑enrollee payments for those services are rising sharply.
Genetic Testing Drives Revenue Growth
In 2024, Medicare paid an average of $794 per enrollee for genetic testing—a 26 % jump from 2023. By comparison, per‑enrollee spending for non‑genetic testing remained relatively stable at just over $200 annually. Even as overall Part B enrollment receiving clinical lab services declined 15 % since 2018, spending per genetic‑testing patient increased, amplifying the financial impact of molecular diagnostics on lab revenue.
OIG suggests the decline in Part B enrollees receiving lab tests may reflect migration to Medicare Advantage plans. For independent labs heavily dependent on traditional fee‑for‑service Part B volume, this shift adds another layer of financial pressure and underscores the need to monitor payer mix closely.
High‑Dollar Molecular Codes Dominate the Top 25
The concentration of revenue in high‑priced molecular assays is intensifying. In 2024, 346 laboratories received more than $1 million in Medicare payments for genetic tests; 55 labs exceeded $10 million. The top 25 laboratory procedure codes accounted for nearly half of all Part B lab spending—more than $4.1 billion.
Genetic tests dominated the fastest‑growing segments. CPT code 87798—used for infectious‑agent detection by nucleic acid when no organism‑specific code exists—generated $443 million in 2024, a 51 % increase over 2023, making it the highest‑paid lab test under Part B. An epilepsy genomic panel (CPT 81419) posted a five‑fold spending increase year over year. Several oncology liquid‑biopsy assays remain among the highest‑reimbursed tests, with median payments reaching into the thousands of dollars.
Routine Testing Holds Volume—but Not Spending Power
In contrast, routine tests familiar to every clinical laboratory—comprehensive metabolic panels (80053), CBCs (85025), lipid panels (80061), thyroid testing (84443), and A1C (83036)—either declined or remained flat in spending. Comprehensive metabolic panel spending has dropped 25 % since 2018 and fell from the top‑spending position in 2023 to second place in 2024. These high‑volume, low‑margin tests continue to anchor daily lab operations but represent a shrinking share of total Medicare dollars.
Importantly, OIG notes that these shifts are not driven by changes in the Clinical Laboratory Fee Schedule, which has remained largely frozen since 2020 under provisions from the Protecting Access to Medicare Act. Instead, spending growth reflects changes in utilization, test mix, and per‑enrollee costs.
For clinical laboratory leaders, the message is clear: Medicare’s lab dollars are increasingly concentrated in molecular diagnostics. That shift brings opportunity—but also heightened regulatory scrutiny. OIG’s history of fraud alerts and audits in genetic testing suggests that compliance, documentation, and medical‑necessity controls will remain critical as high‑complexity testing continues to expand within the Medicare population.
This article was created with the assistance of generative AI and has undergone editorial review before publishing.
— Janette Wider
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