OIG Adds Medicare Part B Genetic Testing to Its 2026 Audit Work Plan
Short answer: On June 15, 2026, HHS-OIG added a new Work Plan item (OEI-09-26-00270) examining Medicare Part B genetic testing for fraud, waste, and abuse, including geographic payment variation tied to Palmetto GBA's MolDX program. The review follows Part B genetic-test spending topping $3.6 billion in 2024 (up roughly $500 million year over year) and a May 2026 sentencing in a $522 million genetic-testing fraud and kickback case. Labs, ordering clinicians, and RCM teams should expect closer documentation and medical-necessity scrutiny ahead.
A New Line Item on OIG's Audit Docket
The HHS Office of Inspector General maintains a running Work Plan of the audits, evaluations, and inspections it intends to pursue across Medicare and Medicaid. On June 15, 2026, OIG's Office of Evaluation and Inspections added a project titled "Trends and Vulnerabilities in Genetic Tests Covered Under Medicare Part B," tracked under project number OEI-09-26-00270. According to the OIG's own Work Plan listing, the stated objective is to identify genetic tests that may be vulnerable to fraud, waste, and abuse; assess trends among laboratory test providers; and examine geographic variation in billing, including participation in the Molecular Diagnostic Services Program — better known in the industry by its administrative name, MolDX, the molecular test coverage and coding framework Palmetto GBA built and that CMS has since directed other Medicare Administrative Contractors to adopt.
OIG did not publish a target completion date or a specified analysis period on the Work Plan page itself, though the objective references full-year 2024 Part B spending data as its financial baseline. Health policy analysts covering the announcement, including the independent Discoveries in Health Policy blog, note that this project runs alongside a separate June 2026 OIG initiative scrutinizing Medicare payments for expanded laboratory panels billed under CPT 87798 — a signal that OIG is examining molecular and infectious-disease panel billing on more than one front simultaneously this year.
The Money Behind the Scrutiny
OIG rarely opens a Work Plan item without a spending trendline to justify it, and genetic testing has one. Per the Work Plan objective, Medicare Part B spending on genetic tests reached $3.6 billion in 2024, an increase of roughly $500 million from the prior year. That trajectory has drawn attention beyond OIG: CMS's own Center for Program Integrity has published a fraud-scheme fact sheet on genetic testing specifically, and separately reported that in 2026 it denied $73.2 million in Medicare laboratory payments and suspended $38.8 million more tied to laboratories CMS considered suspicious, according to the CMS fact sheet. None of that guarantees any particular lab or ordering pattern is a target — the overwhelming majority of Part B genetic testing is medically necessary and appropriately billed — but it explains why OIG chose this year to formalize a dedicated review rather than continue relying on complaint-driven investigations alone.
A Case That Shows Why OIG Is Looking
The fraud risk OIG's Work Plan references is not abstract. On May 4, 2026, the Department of Justice announced that two men — Reyad Salahaldeen, 57, of Buford, Georgia, and Mohamad Mustafa, 28, of Duluth, Georgia — were sentenced to prison for their roles in a scheme that billed approximately $522 million in fraudulent claims for genetic tests, according to the DOJ's press release. The tests at issue were marketed as predicting cancer risk and adverse drug reactions. Operating through four laboratories Salahaldeen controlled, the scheme recruited Medicare and Medicaid beneficiaries through telemarketing calls, door-to-door visits, and health fairs; paid marketers kickbacks to collect DNA swabs and requisition forms; and used falsified medical-necessity documentation and sham marketing contracts to disguise the illegal payments, per DOJ's account of the case.
Salahaldeen received a 151-month prison sentence and was ordered to pay $84,594,165 in restitution plus $3,044,866 in forfeitures, including bank accounts, a vehicle, and real property in Texas and Georgia. Mustafa was sentenced to three years in prison and ordered to pay $64,301,569 in restitution. DOJ's release notes insurers had paid out approximately $84 million of the $522 million billed before the scheme was stopped. It is exactly this pattern — door-to-door and telemarketing recruitment, requisition forms detached from any treating-provider relationship, and marketing commissions disguised as legitimate fees — that OIG's new Work Plan item is designed to surface earlier and at scale, rather than case by case after the fact.
What OIG Will Actually Examine
Based on the Work Plan's stated objective, three threads run through the coming review:
- Test-level vulnerability. OIG intends to identify which specific genetic tests, or categories of tests, show billing or utilization patterns consistent with fraud, waste, or abuse risk — rather than treating all Part B genetic testing as a single category.
- Provider-level trends. The review will assess trends among laboratory test providers, which in past OIG work has meant looking at billing volume growth, concentration among a small number of high-volume labs, and ordering-provider patterns that deviate from peer norms.
- Geographic variation and MolDX participation. OIG will examine how billing and coverage outcomes differ across Medicare Administrative Contractor jurisdictions, specifically in relation to participation in the Molecular Diagnostic Services Program. Because MolDX now covers a large share of MAC jurisdictions, this comparison will likely highlight coverage gaps between MolDX and non-MolDX regions, which matters directly to labs operating across multiple jurisdictions.
What This Means for Labs, Medical Directors, and RCM Teams
This Work Plan item does not itself change coverage policy, create a new LCD, or impose a new billing requirement. What it signals is where federal attention is heading, which is useful information for anyone managing audit and documentation risk today rather than after an OIG report or a Comprehensive Error Rate Testing referral arrives.
- Revisit medical-necessity documentation now. Every genetic test order should trace to a documented treating-provider relationship, a clinical indication consistent with payer policy, and a requisition that was not generated through a telemarketing, health-fair, or door-to-door channel.
- Audit ordering-pattern outliers internally. Labs and reference networks should look at their own ordering-provider data the way OIG is expected to: volume growth that outpaces peer benchmarks, concentration among a small number of ordering providers, or panels ordered without a clear clinical trigger are the patterns most likely to draw downstream attention.
- Separate marketing compensation from referral volume. As covered in our analysis of the Ninth Circuit's EKRA ruling, commission structures tied directly to referral or test volume carry elevated risk under both EKRA and the federal Anti-Kickback Statute — and are precisely the structure DOJ highlighted in the $522 million case above.
- Know your MAC's MolDX status. Coverage criteria, prior-authorization expectations, and documentation standards can differ meaningfully between MolDX and non-MolDX jurisdictions. RCM and coding teams operating across jurisdictions should confirm which set of local coverage rules applies to each claim rather than assuming national uniformity.
- Expect a report, not an enforcement action, first. OIG Work Plan items typically conclude in a published evaluation report with recommendations to CMS, not an immediate enforcement sweep. That report, once released, is worth building into ongoing compliance monitoring rather than treating this stage as urgent in isolation.
For related context on how documentation gaps translate into denied claims, see our breakdown of common genetic testing denial reasons, and for the compliance side of marketing and sales compensation, see our analysis of the Ninth Circuit's EKRA ruling for lab sales commissions. Both intersect directly with the fraud-vulnerability patterns OIG's new review is expected to examine.
Educational Disclaimer
This article is provided for general educational and business-operations purposes for laboratory, medical-director, ordering-clinician, and revenue-cycle audiences. It summarizes a publicly posted HHS-OIG Work Plan item and related public enforcement records as of the date of publication and is not legal, compliance, or coding advice for any specific organization, billing arrangement, or jurisdiction. OIG Work Plan items can be revised, delayed, or closed without a published report. Organizations should consult qualified healthcare compliance and fraud-and-abuse counsel before changing documentation, marketing, or billing practices in response to this or any Work Plan item. This content is not diagnostic or treatment guidance for any patient.
Sources: HHS-OIG, Work Plan item "Trends and Vulnerabilities in Genetic Tests Covered Under Medicare Part B," project OEI-09-26-00270 (announced June 15, 2026); U.S. Department of Justice, Office of Public Affairs, "Two Sentenced to Prison for $522M Genetic Testing Fraud and Illegal Kickback Scheme Targeting Medicare and Medicaid" (May 4, 2026); HHS-OIG enforcement notice of the same case; CMS Center for Program Integrity, genetic testing fraud scheme fact sheet (cms.gov/files/document/cpi-genetic-testing-fraud-scheme-factsheet.pdf); Discoveries in Health Policy, "OIG: Another Workplan, This Time It's Genetic Tests in Part B" and "87798: OIG Going After Use of ‘Panels’ Larger than 5 Assays" (June 2026). Learn more about how ScreenMyGene supports labs navigating coverage, billing, and compliance operations at screenmygene.com.
Frequently Asked Questions
What exactly did OIG announce on June 15, 2026?
HHS-OIG's Office of Evaluation and Inspections added a Work Plan item, project OEI-09-26-00270, to examine Medicare Part B genetic testing for fraud, waste, and abuse vulnerability, assess trends among laboratory providers, and review geographic billing variation tied to MolDX participation. No completion date has been published.
Does this mean my lab is being audited right now?
Not necessarily. A Work Plan item describes OIG's intended review scope, not an audit of any specific organization. It typically leads to a published evaluation report with CMS-facing recommendations rather than an immediate, individualized enforcement action, though it can surface patterns that inform later targeted reviews.
Why is $3.6 billion in spending significant to this review?
Per the Work Plan's own objective, Medicare Part B genetic-test spending reached $3.6 billion in 2024, up roughly $500 million year over year. That growth trajectory, combined with prior fraud findings involving deceptive telemarketing and kickbacks, is the stated basis for opening a dedicated review this year.
What does MolDX have to do with this OIG review?
MolDX, formally the Molecular Diagnostic Services Program, is the molecular test coverage and coding framework originally built by Palmetto GBA and since adopted by additional Medicare Administrative Contractors. OIG's review will compare billing and coverage patterns between MolDX and non-MolDX jurisdictions as part of its geographic-variation analysis.
What is the single most useful step a lab can take right now?
Confirm that every active genetic-test requisition traces to a documented treating-provider relationship and payer-consistent medical necessity, and that no marketing compensation scales directly with referral or test volume — the two patterns most directly implicated in both this Work Plan item and the $522 million case DOJ resolved in May 2026.