Genetic tests make up a growing share of total spending on laboratory tests under Medicare Part B, according to a report posted last week by the Department of Health and Human Services’ Office of Inspector General.
They comprised 43% of Part B spending on lab tests in 2024, rising from 18% in 2018, according to the OIG.
Genetic tests such as cancer screenings can identify mutations or other markers associated with disease or hereditary risk. They are also used to analyze genetic material from pathogens to identify specific infectious organisms.
For its report, the OIG reviewed Medicare Part B claims as part of a requirement to track lab spending under the Protecting Access to Medicare Act.
PAMA changed the way Medicare Part B pays for lab tests. Healthcare industry groups have urged Congress to pass legislation to stop steep reimbursement cuts for testing, triggered by PAMA. Congress included a one-year delay to the cuts in an appropriations bill that passed this week.
The OIG report found that in 2024, Part B spending on genetic testing rose 20% from the prior year, to $3.6 billion. Meanwhile, spending on non-genetic tests such as metabolic and lipid panels and thyroid tests totaled $4.8 billion, flat compared with 2023.
Despite higher Part B lab test spending, the number of Medicare enrollees getting testing fell steadily, declining 15% from 2018 through 2024. The drop may reflect a broader shift in enrollment to Medicare Part C managed care, the OIG said.
PAMA also requires the OIG to release an annual review of the top 25 lab tests by expenditures, the oversight body said. In 2024, the top 25 tests drove almost half of all Part B lab spending.
A test that uses genetic material from a pathogen had the highest expenditure at $442.5 million, with a median payment of approximately $447 per claim.
