Lab Developed Tests Have Been Set Free. Now You Need a Lab RCM Plan.

Oversight in the lab industry has just taken a major blow from the FDA - and every laboratory needs to rethink its revenue cycle strategy.

Earlier this year, the FDA rescinded its 2024 rule that would have treated laboratory developed tests (LDTs) as in vitro diagnostics (IVDs) and medical devices. The final rule, published in May 2024, sought to expand the FDA’s authority over LDTs. But following a federal court decision in March 2025 that vacated the rule, the agency officially reverted to the pre-2024 framework in September 2025.

In short: LDTs developed and used within a single laboratory are once again governed primarily under CLIA and CMS oversight, not full FDA medical device regulation.

That reversal – while creating short-term uncertainty – also opens new doors for innovation and growth.

A New Era for Laboratory Revenue Cycle Management

This back and forth has created disruption in laboratory revenue cycle management (lab RCM), but it’s also created a new strategic opportunity. Deregulation opens the door for innovation and new partnerships – healthcare leadership now has the opportunity to bring their communities better-tailored and more forward-thinking solutions. 

At the same time, the reimbursement and lab billing question is always at play. Every new or modified test still needs a sustainable billing pathway, and payers are likely to remain cautious about coverage and clinical validity, even without the FDA rule in place. Now is the time for lab leaders to reassess their offerings from a revenue cycle perspective:

• Evaluate your lab billing solutions, from charge capture and claim submission to denial management and appeals.
• Strengthen your accounts receivable management workflows to reflect the evolving test mix.
• Update compliance protocols and documentation standards to remain audit-ready.

The Staffing Challenge: Training for Complex Code Sets

One of the biggest near-term challenges in lab RCM will be staffing. Pathology and laboratory billing teams must be fluent in CPT and HCPCS code sets, especially molecular pathology and genetic testing codes that are frequently audited.

Billers must understand when tests, equipment, and even specimen transport services are billable, and how those codes interact across payers. That level of precision requires both training and data-driven oversight.

Modern laboratories are now pairing internal expertise with external vendors that specialize in laboratory revenue cycle management to fill these gaps quickly.

Navigating Uncertainty with the Right Lab Billing Solutions

Revenue cycle departments will need a solid and granular understanding of the historical impact of different lab products. This regulatory reversal doesn’t remove payer scrutiny – it shifts it. Payers are expected to step up their own review of laboratory claims, particularly LDTs with limited published validation data.

To stay ahead, successful labs are:

• Automating pathology billing and denial workflows using specialized lab billing software
• Auditing historical performance data to benchmark reimbursement by test type
• Partnering with lab RCM experts to streamline charge entry, payment posting, and appeals

These actions help laboratories maintain financial stability while exploring new testing opportunities.

Turning Change Into Competitive Advantage

Any policy change at this level can feel disruptive. But in our experience, it’s also a chance to modernize.

At 3Gen Consulting, we’ve seen laboratories turn regulatory uncertainty into operational clarity, by synthesizing both internal knowledge and external RCM expertise from vendors. This synergy allows leaders to not only survive but thrive in times of change by innovating confidently while keeping reimbursement predictable.

If you’d like to learn more about how your lab can strengthen its laboratory revenue cycle management framework in this new regulatory era, feel free to contact me here or connect with one of our experienced team members.