Just weeks before the FDA’s sweeping rule to regulate laboratory-developed tests (LDTs) was set to take effect, a federal court struck it down. What does this mean for the field of precision medicine and for labs themselves? There are have been those on the side of regulation arguing its importance for reimbursement. Yet many, such as the plaintiffs in this case, the ACLA and AMP, have argued that FDA regulation could stifle innovation in a new field and even force labs to shut down.

Today we talk with Sarah Overton, Senior Director of Revenue Cycle Management at Velsera, whose team helps clinical labs with everything from validation to reimbursement strategy. She walks us through the practical implications of the ruling. “It came just in time. Even meeting stage one was going to be incredibly burdensome,” she says in today’s interview. (Link to a webinar with Sarah on this topic here.)

* 0:00 Impact of recent court decision on LDTs

* 5:15 Supports an in-between regulation

* 15:15 How are your clients choosing between LDT and IVD?

* 20:00 Topic goes hand-in-hand with reimbursement

* 25:20 Every test is different

Instead of scrapping oversight altogether, Overton argues for a middle ground — more robust than the current CLIA framework, but less rigid than the FDA’s approach. “We need something in between,” she says. “There are already mechanisms in place — like MolDX’s technical assessment — that address analytic validity, clinical validity, and clinical utility. That could be a model to build on.”

We explore how Velsera’s clients are choosing between launching LDTs or IVDs, and what factors drive that decision. Overton emphasizes that reimbursement strategy must be integrated from the beginning — not bolted on at the end. “The test might be clinically excellent, but if it’s not reimbursable, it won’t sustain a lab,” she warns.

“We need standards that ensure quality without crushing innovation,” she says. “There are ways to do that now. Let’s build on what’s working.”

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