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Laboratory Medical Tests: the FDA’s Newest Regulatory Objective

Client Alert

On September 29, 2023, the Food and Drug Administration (FDA) released a proposed rule aimed at strengthening federal regulation of laboratory medical tests. Though the laboratory medical test industry has become a multibillion-dollar industry in America, the industry has never come within the FDA’s regulatory breadth. FDA Commissioner Robert Califf said the proposed rule targets laboratory medical tests that produce inaccurate results, to the risk of patient safety.

Why is the proposed rule necessary?

The risk to patients from laboratory tests has increased in recent years. In decades past, most lab-based tests were “lower risk, small volume” products used for local patients, according to the FDA. As the laboratory test market has grown exponentially, with laboratory companies processing thousands of blood and urine tests per week, there has been little quality control over these tests.

FDA officials have long highlighted the dangers of inaccurate laboratory tests for consumers. Specifically, inaccurate tests can lead to patients receiving an incorrect diagnosis, skipping necessary treatments, or receiving unnecessary medication or surgery. As more tests are mass-produced and mass-marketed, more consumers are facing unreliable and inaccurate tests, prompting the FDA to act.

However, problems with the mass-produced diagnostic test market are not uncommon. During the Coronavirus pandemic, U.S. laboratories quickly produced and sold to American consumers batches of COVID-19 tests without federal oversight. More recently, pregnancy tests produced by laboratories have been advertised to consumers with the promise that they can screen for genetic mutations that can lead to Down’s syndrome, cystic fibrosis, and other disorders. Other laboratory tests advertised directly to consumers have claimed to measure the risk of developing ailments like Alzheimer’s and autism. In response, numerous studies and reports identified that the tests misstated or exaggerated the risks of those conditions to vulnerable consumers.

This proposed rule is not the first time the FDA has attempted to regulate the laboratory industry. Over ten years ago, the FDA drafted guidelines for the industry, but they were never finalized. Last year, lawmakers in Congress with FDA support drafted a bill granting the FDA explicit authority to regulate high-risk tests, but the measure failed to pass in either chamber amidst opposition by industry lobbyists.

What does the proposed rule accomplish?

The FDA’s proposed rule would formally bring under FDA oversight thousands of tests performed in large laboratories. The laboratory tests specifically targeted by the FDA are developed by high-volume laboratories, including academic medical centers and large diagnostic companies. The tests can diagnose diseases like cancer, high cholesterol, and sexually transmitted infections.

Currently, the Centers for Medicare & Medicaid Services (CMS), the federal agency responsible for the Medicaid and Medicare programs, has oversight over testing laboratories. Further, inspectors evaluate the general health and safety conditions and procedures at labs, but there is no quality control or marketing standards for individual tests. Under the proposed rule, the FDA would gradually come to regulate laboratory tests over a five-year period, replacing CMS. At the end of the five years, most new tests would be subject to FDA standards and review before they could be sold to consumers.

While the laboratory industry argues that FDA regulation stifles innovation and new developments, especially during health crises, the FDA is considering exempting from review some tests already sold on the market. The FDA is now accepting comments on its proposed rule for sixty days before drafting a final rule.

If you have questions about the FDA’s proposed rule or laboratory regulations, please contact BMD Vice President and Healthcare Attorney Amanda Waesch.

NLRB Issues Final Rule on Joint-Employer Status

On October 26, 2023, the National Labor Relations Board (NLRB) issued its final rule on determining joint-employer status, departing from its prior 2020 standard. The final rule provides that two or more entities may be considered “joint employers” if each entity has an employment relationship with employees and if the entities share or codetermine one or more employees’ essential terms and conditions of employment. The final rule goes into effect on December 26, 2023, and will only be applied to cases filed after the effective date.

WEBINAR SERIES RECAP | Employment & Labor

BMD Partner and Co-Chair of the Employment & Labor Law Group, Bryan Meek, presented this four-part webinar series on trending topics in employment law.

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Recent Changes to the No Surprises Act’s Federal IDR Process

Proposed changes to the No Surprises Act’s independent dispute resolution (IDR) process were recently issued by the Department of Health and Human Services, Department of Labor, Department of Treasury, and the Office of Personnel Management. The October 27, 2023, proposed rule overhauls the current Federal IDR process in an effort to create efficiencies and reduce delays relating to eligibility determinations and address feedback from interested parties and certified IDR entities.

What Inpatient Behavioral Health Providers Need to Know About ODM's New Draft Rule for Reimbursements

Ohio Department of Medicaid (ODM) recently released a draft rule that will transform how inpatient behavioral health services are reimbursed for some hospitals. ODM will migrate inpatient payments for behavioral health and substance use disorder services (BH/SUD) provided by freestanding psychiatric hospitals (FSPs) from the APR-DRG payment methodology to a per diem payment methodology derived from the APR-DRG system.