Health Law Daily Wrap Up, AUDITS AND MONITORING—OIG REPORTS: OIG audit assesses whether CMS should require independent labs to adopt emergency preparedness plans, (Sep 12, 2025)

By Sara Cracau, J.D.

OIG audit assesses whether CMS should require independent labs to adopt emergency preparedness plans to ensure access to diagnostic tests for infectious disease.

The OIG of HHS conducted a study to assess whether CMS should require independent labs to adopt emergency preparedness plans to ensure access to diagnostic tests for infectious disease. The OIG found that if CMS required emergency preparedness plans for independent labs, it could better ensure that enrollees had access to diagnostic testing related to an emerging infectious disease or biological toxin. The study concluded that diagnostic testing is crucial for diagnosing infected individuals and understanding the spread of disease during an infectious disease emergency. The OIG recommended that CMS consider requiring independent labs that participate in Medicare to adopt emergency preparedness plans in order to better ensure that Medicare beneficiaries have access to diagnostic test relating to an emerging infectious disease or a biological toxin (By Requiring Emergency Preparedness Plans for Independent Labs, CMS Could Better Ensure That Medicare Enrollees Have Access to Infectious-Disease Diagnostic Testing During a Public Health Emergency (OIG Report, No. A-09-223-03003 (September 2025))

Background. A report published by the Pandemic Response Accountability Committee found that Medicare paid more than $551 million for almost eight million diagnostic tests for an emerging infectious disease when a public health emergency (PHE) began beginning in February 2020 through August 2020. Almost half of these tests were performed by independent labs. Various issues were detected that affected Medicare enrollees’ access to diagnostic testing including: availability of tests and shortages in testing supplies. CMS established emergency preparedness requirements for certain provider types to ensure adequate planning for natural and human-cased disasters, facility emergencies, and emerging infectious diseases.

The OIG study. For the audit period (calendar years (CYs) 2020 through 2022, Medicare Part B paid $2.4 billion for 29.2 million selected diagnostic tests for infectious diseases that caused the PHE. These were received by 8.3 million enrollees across the nation. OIG calculated the portion of tests conducted by independent labs. In addition, it conducted interviews with representatives from 11 independent labs and a representative from the American Clinical Laboratory Association (ACLA). It also reviewed CMS’s emergency preparedness rule for provider types participating in Medicare. The study was conducted in accordance with generally accepted government auditing standards.

Findings. The OIG found that if CMS required emergency preparedness plans for independent labs, it could better ensure that enrollees had access to diagnostic testing related to an emerging infectious disease or biological toxin. In the period CY 2020 through 2022, independent labs performed the majority of enrollees’ diagnostic tests nationwide that were reimbursed under Medicare Part B. Although CMS does not require independent labs to have emergency preparedness plans, during the audit period, it had such a requirement for 17 other Medicare-participating provider types. Having an emergency preparedness plan that addresses elements such as supplies and staffing could help enhance access to testing during a PHE. During the first three years of the PHE that existed from January 31, 2020 through May 11, 2023, independent labs performed most of the enrollees’ diagnostic testing relating to the emerging infectious disease (27.9 million of 29.2 million total diagnostic tests) and some independent labs experienced issues that could have affected enrollees’ access to tests. Interviews with representatives of the independent lab and ACLA representatives disclosed shed light on the testing process and staffing issues that were experienced and that affected their ability to perform diagnostic testing during the PHE. Shortages of supplies relating to testing were experienced as well as shortages of specimen collection materials, swabs, transport media, and reagents. As a result of the shortage of supplies, testing took place at below capacity. Testing allows enrollees to make informed health decisions. The supply and staff shortages may have resulted in: (1) tests being prioritized for certain populations; (2) people not being tested; (3) testing backlogs and long waits for results which rendered the results useless; and (4) delayed testing and treatment. Without requiring an emergency preparedness plan, enrollees’ access to diagnostic testing for an infectious disease or biological toxin may be impacted in a future PHE. It is important for CMS to protect the health of enrollees from the effects of an emerging infectious disease and keep enrollees safe from uncontrolled spread by helping to ensure access to testing.

Conclusion. Diagnostic testing is crucial for diagnosing infected individuals and understanding the spread of disease during an infectious disease emergency. During the period CYs 2020 through 2022, independent labs performed more than 95 percent of beneficiaries’ diagnostic tests nationwide that were reimbursed under Medicare Part B and were related to the emerging infectious disease that caused the PHE that lasted from January 31, 2020 through May 11, 2023. CMS does not require independent labs to have emergency preparedness plans. However, during the audit period, it had such a requirement for certain Medicare-participating provider types. Elements which could be included in an emergency preparedness plan include the following: identifying key suppliers and alternative sources for supplies and ensuring adequate staffing to maintain the facility’s operational functions.

Recommendations. The OIG recommended that CMS consider requiring independent labs that participate in Medicare to adopt emergency preparedness plans in order to better ensure that Medicare beneficiaries have access to diagnostic test relating to an emerging infectious disease or a biological toxin. CMS did not indicate whether it concurred with the recommendation or not but stated that it would take the OIG findings and recommendations into account. It also provided information on the actions it took during a recent PHE to promote beneficiary access to important diagnostic tests. In addition, CMS provided technical comments on the OIG’s draft report.

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