By JULIE EGGINGTON, EKATERINA CLEARY & LEEZA OSIPENKO

When CMS issued its Request for Information under the Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative in February, it zeroed in on a long-festering problem: fraud, waste, and abuse in laboratory testing, especially in genetic and molecular diagnostics.

The laboratory industry will respond. And when it does, its arguments will sound polished, familiar, and deeply reassuring. They will also be either disingenuous or unproven.

If policymakers want this effort to succeed, they should be prepared to handle three claims that have long shielded problematic practices from meaningful oversight.

Claim 1: Fraud, waste and abuse is limited to a few bad actors

Expect labs to argue that fraud, waste, and abuse is rare, isolated, and already addressed through enforcement actions. The narrative will feature a handful of egregious cases, presented as outliers in an otherwise trustworthy ecosystem.

But the problem is not a few rotten apples. It is the orchard’s design.

Take “code stacking” for example, in which laboratories bill multiple individual genetic test codes rather than a single panel code, often inflating reimbursement. In one analysis, laboratories used between 1 and 12 billing codes for hereditary cancer panels with the same indications for testing, with estimated average charges ranging from $679 to $8,589 for ostensibly comparable tests. The repetition of these behaviors across companies suggests systemic incentives, not isolated misconduct.

Ample Medicare billing data, whistleblower cases, and Department of Justice settlements point to patterns, not anomalies: high-volume genetic panels ordered with little clinical justification, molecular pathology tests billed under grab bag and overly permissive billing codes, and aggressive marketing and patient harvesting practices targeting vulnerable populations.

A key driver is opacity. Many laboratory-developed tests (LDTs) are marketed under similar or identical names despite meaningful differences in design, accuracy, and intended use. To a clinician or payer, they appear interchangeable. In reality, they are not.

This naming ambiguity allows lower-quality tests to ride the coattails of better-validated ones, while still commanding reimbursement. Fraud, in this context, is not always a dramatic act. It is often embedded in routine billing.

Claim 2: Precision medicine advanced by genetics is worth the cost due to improved patient outcomes

The second argument will appeal to aspiration. Labs will emphasize that genetic testing is the backbone of precision medicine and therefore a worthwhile investment for CMS, despite the ballooning costs.