FDA’s Lab-Developed Test Rule Vacated, Oversight Gap Persists

Regulatory oversight of hereditary cancer genetic tests sits at the intersection of two federal agencies with different jobs, and a recent court decision has widened the gap between what each one actually covers. The FDA has long treated most laboratory-developed tests (LDTs) — tests designed, manufactured, and run within a single laboratory — under a policy of enforcement discretion, meaning it generally hasn’t required premarket review for them. In 2024, the FDA finalized a rule intended to phase in greater oversight, under which high-risk LDTs, including many used for cancer diagnostics and genetic conditions, would eventually need premarket review before clinical use.

That rule did not survive. In late March 2025, a federal district court ruled against the FDA’s rule and vacated it, and the government did not appeal the decision, meaning the rule will not take effect. Separately, legislation that would have created a new statutory framework for regulating LDTs and other in vitro clinical tests — the Verifying Accurate, Leading-edge IVCT Development (VALID) Act — has not passed Congress despite bipartisan support; a 2022 FDA reauthorization bill passed without it. The practical result is that most hereditary cancer panels run as laboratory-developed tests continue to be regulated primarily through the Clinical Laboratory Improvement Amendments (CLIA) program that CMS administers, which sets quality and analytical-validity standards for the laboratory itself rather than reviewing the clinical validity of any specific test.

CMS’s own coverage policy has moved in the opposite direction — toward more defined national coverage rather than less. A January 2020 National Coverage Determination established Medicare coverage for next-generation sequencing-based testing, including multigene panel testing for hereditary cancer, under specific circumstances such as a clinical indication and risk factor for inherited cancer, and when the test is performed in a CLIA-certified laboratory and ordered by a treating physician. Local Medicare Administrative Contractors retain authority to set their own coverage policies for NGS-based hereditary cancer testing beyond that national floor.

The Affordable Care Act mandates coverage for genetic counseling and BRCA1/BRCA2 mutation testing, with no out-of-pocket costs, for eligible women with certain personal or family histories of breast, ovarian, fallopian tube, or primary peritoneal cancer.

That ACA mandate is narrower than it might sound: it applies specifically to BRCA1 and BRCA2 testing for qualifying individuals, and does not require coverage for genetic counseling or testing tied to other hereditary cancer genes or syndromes. Private insurers frequently extend coverage further, to multigene panel testing for people who meet established testing guidelines, but Medicaid coverage varies considerably by state — most state programs do not cover multigene panel testing, though many do cover testing specifically for Lynch syndrome.

For patients, this patchwork means two things worth confirming before testing: first, that the specific panel being ordered is actually covered by the relevant plan, since coverage rules differ meaningfully between Medicare, Medicaid, and private insurance; and second, that “FDA-regulated” is not a meaningful marker of quality for most hereditary cancer panels today, since the overwhelming majority operate as laboratory-developed tests under CLIA oversight rather than FDA premarket clearance.