This post was co-authored by Paul Palma, legal intern at Robinson+Cole. Paul is not admitted to practice law.

Introduction

On January 28, 2026, the U.S. Department of Health and Human Services Office of Inspector General (OIG) released a new report analyzing Medicare Part B (Part B) spending on laboratory tests in 2024. The Protecting Access to Medicare Act of 2014 (PAMA) requires OIG to publish an annual report detailing the top 25 clinical lab tests by expenditure. Each year, OIG evaluates Part B claims data for tests covered under the clinical laboratory fee schedule (CLFS). Below is a breakdown of the key trends highlighted in the 2024 report. Most notably, 2024 showed a significant rise in genetic and infectious Polymerase Chain Reaction (PCR) disease testing. 

Overall Part B Spending and Enrollment

Part B spending on clinical laboratory tests reached a peak of $7.9 billion in 2021 during the COVID-19 public health emergency, then declined to $7.8 billion by 2023. In a notable shift, spending rose again in 2024, increasing 5% to $8.4 billion, despite there being no changes to the CLFS since 2020.

Strikingly, while overall spending increased, the number of Part B enrollees receiving lab tests fell by 15%, dropping from 27.7 million in 2018 to 23.4 million in 2024. According to OIG, this decline may reflect a broader migration of beneficiaries from Medicare Part B to Medicare Advantage (Part C) enrollment.

“Genetic” Testing Continues to Rise

The OIG report broadly defines “genetic” testing to include: (a) analysis of genetic material to monitor for genetic variations, mutations or other markers associated with disease or hereditary risk; and (b) analysis of genetic material from pathogens for bacteria or viruses. With the industry seeing an increase of PCR testing for infectious disease and detailed genetic antibiotic resistance testing, Medicare spending significantly increased in 2024.

Historically, spending on non-genetic tests such as complete blood counts, metabolic panels, lipid panels, and thyroid tests have far exceeded spending on genetic tests relating to conditions such as cancer, fungal infection, and epilepsy. In 2018, genetic testing accounted for 18% of Part B spending on laboratory tests while 82% went to non-genetic tests.  By 2024, that gap had significantly narrowed with 43% of Part B spending on laboratory tests attributed to genetic testing compared to 57% for non-genetic testing. Over just one year (from 2023 to 2024), Part B spending on genetic testing increased by 20% from $3 billion to $3.6 billion.

Utilization trends reflect this same shift. In 2018, 2.4 million Part B enrollees received at least one genetic test, out of the seven million total genetic tests performed that year. By 2024, the number of enrollees receiving at least one genetic test increased by 85% to 4.5 million while the total number of genetic tests performed that year increased by 160% to 18 million. In 2024, the average Part B enrollee received four genetic tests at a cost of $794 per enrollee, and 16 non-genetic tests at a cost of $207 per enrollee.

In 2024, genetic testing related to infectious disease totaled $1.4 billion, up from $1.2 billion in 2023, and hereditary/disease genetic testing increased from $1.8 billion in 2023 to $2.2 billion in 2024. In 2024, a total of 346 laboratories received over $1M in reimbursement for “genetic” testing. Among them, 55 received over $10M in reimbursement for genetic testing.

Top 25 Lab Tests

So, now ranking at the top of the chart of all tests paid under Part B spending is CPT 87798 for infectious disease. Also ranking in the top 15 is CPT 87481. 

The top 25 lab tests accounted for $4.1 billion, nearly 50% of all Part B laboratory spending in 2024. Among these, ten were genetic/PCR infectious disease tests, totaling $1.5 billion in Part B spending, while the remaining 15 were non-genetic tests totaling $2.6 billion in Part B spending. Notably, six of the ten genetic tests in 2024 showed at least a 30% increase in Part B spending compared to 2023. The OIG report focused on the fact that the average amount that Medicare Part B paid per enrollee for “genetic” tests approached $800, a 26% increase since 2023. Some of the largest growth was seen for tests billed under procedure CPT 87798, which reached $443 million in Part B spending, representing a 51% increase between 2023 and 2024.

Takeaways

The 2024 OIG report provides context for the increase in audits around the primarily used codes for infectious disease testing of 87798 and 87481. It also highlights the fact that genetic and PCR infectious disease testing is reshaping the Medicare Part B laboratory spending landscape. These types of testing, once a small share of the Part B landscape, now accounts for nearly half of all spending and continues to grow at a significant rate year after year. The impact of genetic and PCR infectious disease testing on Part B spending is highlighted by the increase in costs despite the decreased utilization.  

Laboratories should recognize that genetic and PCR infectious disease testing has become a central driver of Part B costs which is resulting in a shift of audits and likely enforcement priorities by OIG to ensure that labs performing this type of testing are remaining compliant with all Medicare billing policies.