Tuesday, August 25, 2026

OIG and Medicare Fraud: Recent Years and 2026

 Yes. There are two genuinely important new OIG Work Plan items in 2026, and one is exactly the MolDX-versus-non-MolDX comparison you heard about. I find no separate OIG project on prior authorization for genetic testing.

The headline findings

1. OIG is formally asking whether MolDX jurisdictions look different

On June 15, 2026, OIG added an active project titled Trends and Vulnerabilities in Genetic Tests Covered Under Medicare Part B (OEI-09-26-00270).

OIG will:

  • Identify genetic tests potentially vulnerable to fraud, waste, and abuse.

  • Analyze trends among laboratories.

  • Examine geographic variation, “particularly between jurisdictions that do and do not participate in the Molecular Diagnostic Services Program.”

So your description is fair: OIG intends to test whether the MolDX states have fewer—or at least different—genetic-testing vulnerabilities. OIG does not quite promise to calculate a “fraud rate”; it will probably compare utilization, spending, provider concentration, per-beneficiary testing and conspicuous outliers. But the policy question could hardly be clearer: does MolDX’s test identification, Z-code system, coverage apparatus and claims editing suppress the nonsense seen elsewhere?

This is probably the most consequential federal evaluation of MolDX since the program began.

2. OIG has separately opened an audit of expanded pathogen panels

Four days earlier, on June 11, OIG announced Medicare Payments to Providers for Selected Expanded Laboratory Panels (OAS-26-09-071).

OIG defines expanded panels as tests detecting six or more pathogens, contrasts them with targeted panels of five or fewer, and says there are concerns that providers are using the expensive expanded panels when a targeted panel would suffice. This will be an actual compliance audit against Medicare and MAC medical-necessity requirements.

Although OIG does not name 87798 in the project description, this is plainly aimed at the same ecosystem: large respiratory, urinary, wound and other infectious-disease PCR panels, including panels assembled through numerous units of nonspecific organism codes.

The 81408-to-87798 succession is real—with one coding correction

The code was 87798, not 87789. There is also a nomenclature distinction:

  • 81408 is genuinely a Tier 2 molecular-pathology code.

  • 87798 resides in CPT microbiology: nucleic-acid detection of an infectious organism, NOS, amplified-probe technique, each organism.

  • Beginning with the latest annual report, OIG classifies human and pathogen nucleic-acid testing together as “genetic tests.” Thus, 87798 is molecular testing but not “molecular pathology” in the CPT-section sense.

The progression is remarkable:

Claims yearCode and OIG result
202181408 generated $282.2 million for 141,146 units at $2,000—seventh among every CLFS code and the largest-spending genetic code. Meanwhile 87798 was already at $213.7 million. OIG 2021 annual analysis
202387798 reached $292.4 million, ranking fifth overall, on 8.5 million units at $35.09. OIG 2023 analysis
202487798 exploded to $442.5 million, up 51%, and became the single highest-spending code on the entire CLFS. OIG 2024 analysis

There is a terrific hidden clue in the latest report. OIG gives the median 87798 payment per claim line as $447.05. The underlying rate was approximately $35.09 per organism:

[
13 \times $35.09 \times 98% = $447.05
]

That means the reported median corresponds exactly to 13 organisms—the full longstanding MUE—after 2% sequestration. In other words, this was not principally a $35 test becoming number one through legitimate single-organism volume. At least half of the relevant claim lines appear to have been billed at the 13-unit ceiling. It is almost a statistical fingerprint of panel unbundling.

What OIG previously established about 81408

The definitive 2023 audit, CMS’s Oversight of Medicare Payments for the Highest Paid Molecular Pathology Genetic Test Was Not Adequate, found:

  • $888.2 million paid for 450,795 units of 81408 during 2018–2021.

  • Two of seven MACs accounted for 97%—$865.7 million—of the spending.

  • Four MACs had mechanisms to identify the actual gene being tested; their combined payments accounted for only 3%.

  • 80% of affected beneficiaries lacked an established relationship with the purported ordering provider, using OIG’s definition.

  • Five MACs prohibited or limited 81408; the two high-paying MACs had essentially no diagnosis limitations until late 2021.

  • After those two MACs changed their articles, payments had disappeared by December 31, 2021.

That is already a strong natural experiment suggesting that granular test identification and restrictive local controls matter. The new 2026 MolDX project scales that question from one grotesque code to the entire genetic-testing sector.

Two other precursor reports matter:

  • OIG’s 2021 genetic-testing trends report found payments quadrupled from 2016 through 2019, 20 laboratories received 73% of all payments, more than 67,000 beneficiaries received at least 10 genetic tests, and MAC coverage guidance varied dramatically.

  • Its 2022 COVID add-on testing report identified 378 laboratories with questionably high billing for respiratory, allergy or genetic add-ons and referred them to CMS.

What about “OIG, prior authorization and genetic testing”?

I cannot find such an OIG Work Plan project.

The current Work Plan contains prior-authorization studies involving Medicare Advantage post-acute care and Medicaid managed care, but none pairs prior authorization with genetic or molecular testing. The June genetic-testing project never uses the term “prior authorization.”

The likely conflation is MolDX itself. MolDX requires advance test registration, a unique Z-code and, for many tests, a successful technical assessment before routine payment. That resembles product-level preclearance, but it is not beneficiary-by-beneficiary prior authorization in the ordinary payer sense.

OIG could eventually recommend prior authorization or prepayment review, but it has not announced that as the study’s objective.

Finally, the reported 2026 collapse in 87798 payment appears real but contractor-driven: laboratories report that non-MolDX MACs are increasingly paying only two units and denying additional units with N35 program-integrity edits. I found no published national CMS policy replacing the 13-unit MUE. Thus, I would currently describe it as a sharp, multi-MAC program-integrity clampdown rather than a formal national prior-authorization policy.

The annual 2025 CLFS report is already active on OIG’s Work Plan, but it will cover 2025 claims. The full effect of the 2026 87798 shutdown will not appear in the statutory annual series until OIG analyzes 2026 claims.