Laboratory-Developed Tests After the FDA Rule Was Struck Down: The Oversight Boundary

A federal court vacated the FDA rule for laboratory-developed tests on March 31, 2025, and the Food and Drug Administration removed the added regulatory text on September 19, 2025. The Clinical Laboratory Improvement Amendments still govern laboratory processes, including analytical validation. For someone who develops, runs or sells these tests, a laboratory’s certificate, its clinical claims and its Medicare bills answer different questions.

An insider may know where the test’s clinical claims and the evidence behind its billing part company. That is where this regulatory distinction becomes a laboratory fraud concern.

What Is a Laboratory-Developed Test?

A laboratory-developed test is a diagnostic test designed, manufactured and used within a single laboratory. It examines a human specimen, such as blood or tissue. The Congressional Research Service’s account of the FDA dispute distinguishes that service from a commercially available test kit.

The distinction between laboratory services and physical products became central to the court’s decision.

Some genomic tests for cancer and most newborn screening tests are laboratory-developed tests, according to the Congressional Research Service. The term describes how a test is developed and used. The evidence behind each test still has to support what that test claims to tell a clinician or patient.

For an insider, the useful starting point is the actual operation: where the test was designed, where it is performed and whether the business supplies a testing service or distributes a kit. Those facts explain why two diagnostic businesses can have different FDA histories while both work with human specimens.

What the FDA Rule Would Have Changed

The Food and Drug Administration’s 2024 rule would have brought laboratory manufacturers under the agency’s general device requirements. None of its planned compliance stages took effect.

The agency proposed the rule in October 2023 and published its final laboratory-developed test rule on May 6, 2024. The rule said a laboratory that makes its own diagnostic test is a device maker. The Food and Drug Administration also announced a staged end to its general practice of not enforcing device requirements for laboratory-developed tests.

The plan phased in reporting, registration, labeling and quality systems before premarket review.

Premarket review came later: first for high-risk tests, then for moderate-risk and low-risk tests requiring premarket submissions. The planned stages ran from May 2025 through May 2028. The court set the rule aside before the first stage arrived.

This is why an old presentation about preparing for FDA oversight can describe substantial work that never became due under this rule. The existing laboratory requirements continued on their own footing.

Why Did the Court Set Aside the FDA Rule?

The court held that laboratory test services fell outside the device authority the Food and Drug Administration relied on. It read the device terms in the Federal Food, Drug, and Cosmetic Act as referring to tangible products, while a laboratory-developed test service consists of work performed on a patient’s specimen.

A federal court in Texas heard challenges from the American Clinical Laboratory Association and the Association for Molecular Pathology. As the Congressional Research Service explains, the court accepted the distinction between professional laboratory services and commercially distributed medical devices.

The court’s reasoning also drew on Congress’s separate framework for clinical laboratories under the Clinical Laboratory Improvement Amendments.

That gives the decision a specific meaning for a laboratory’s test portfolio. The court decided the reach of an agency’s authority. The clinical evidence for an individual test remains a question about that test: what it measures, what the result means and how it is used in care.

What Changed After the FDA Rule Was Struck Down?

The Food and Drug Administration restored the regulation’s earlier text. Its rule carrying out the court’s decision removed the words it had added to bring laboratory manufacturers expressly within the definition. The removal took effect on publication.

Most laboratory-developed test services consequently remain subject to federal oversight through the laboratories regulated by the Clinical Laboratory Improvement Amendments, without the general FDA premarket pathway the rule would have imposed. The single-laboratory service distinction still matters when someone describes a test as an LDT.

Congress also considered a separate framework through the VALID Act. Versions introduced in 2020, 2021 and 2023 would have created a distinct category for in vitro clinical tests. Those bills did not become law.

What Does CLIA Still Cover?

The rule’s removal left the analytical-validation requirements under the CLIA regulations in place.

Analytical Validation and Clinical Validity

Analytical validation addresses the measurement. The Clinical Laboratory Improvement Amendments examine accuracy, precision, analytical sensitivity, analytical specificity, reportable range and reference intervals. These are concrete questions about what the assay detects and how it performs.

Clinical validity concerns what the result means clinically. A laboratory’s ability to measure its target and the evidence connecting that target to a patient’s condition are separate parts of the test’s story. Clinical utility takes the question into care: what the result contributes to managing the patient’s medical problem.

A validation file can address the measurement. Clinical evidence has to support the meaning claimed for the result. The absence of general FDA premarket review leaves those questions to be examined for the particular test.

Does CLIA Certification Establish Medicare Coverage?

Certification under the Clinical Laboratory Improvement Amendments is a condition of Medicare laboratory payment, but coverage also depends on the test and its clinical use. A laboratory certificate does not establish medical necessity for a particular patient.

In its explanation of the certification requirement, the Centers for Medicare & Medicaid Services says Medicare will pay for laboratory services only when the laboratory holds the appropriate certificate for the testing it conducts. State Medicaid plans generally also pay only for services furnished by CLIA-certified laboratories.

A billing code and a price are separate again. A test can have a national fee and remain uncovered under a national or local coverage determination. Medicare’s coverage policies determine whether the service qualifies for payment. The fee schedule supplies a rate for covered services.

Where a Laboratory Insider’s Knowledge Matters

The useful question is where the test’s evidence, its clinical claims and its billing diverge. A developer may know the validation work. A laboratory employee may know how the test was performed. A clinician may know what the result was supposed to contribute to care. Billing staff may know what the laboratory submitted for payment.

We work with those different views of the same test. If the concern is a clinical claim that outruns the validation work, we examine the evidence supporting the claim and how the test was presented. If the concern is testing billed to a government health care program, we connect the ordering, performance and payment records. Those connections give a healthcare fraud inquiry substance beyond the regulatory label.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When the Test’s Claims Outrun Its Evidence

If you know where a laboratory’s validation work, clinical promises and government billing part company, talk with our whistleblower experts about the test and the decisions behind it. Our whistleblower experts shape what you know into your strongest laboratory whistleblower case and bring in laboratory fraud whistleblower lawyers who understand clinical testing and Medicare payment. We stay with you through the case, connecting what you know inside the laboratory to what the government paid for.