Laboratories are beginning to assess the scale of operational changes needed to comply with a new federal rule that expands regulation of laboratory-developed tests (LDTs). In a major policy shift, most tests designed and used solely within a single laboratory must now meet U.S. Food and Drug Administration (FDA) requirements for medical devices—requirements outlined in thefinal rule published in May. These requirements include adverse event reporting, premarket review, registration, and labeling, and will be phased in over the next four years.

Although the policyaims to improve the accuracy and reliability of LDTs, health industry organizations warn that the new rule will increase costs and administrative burdens, potentially forcing laboratories to reduce the tests they offer. Lab executives say LDTs often fill gaps in clinical needs, especially in areas with small patient populations or rare diseases, where commercial tests are often lacking.

"We remain concerned that many critical tests developed by hospitals and health systems could be subjected to unnecessary and costly paperwork burdens," said Stacey Hughes, executive vice president of government relations and public policy at the American Hospital Association. "This will lead to a significant reduction in patient access to innovative and targeted diagnostic tests."

Laboratory organizations arechallenging the rule in court. The American Clinical Laboratory Association and the Association for Molecular Pathology have sued the FDA, alleging it overstepped its regulatory authority, and the cases have been consolidated in the U.S. District Court for the Eastern District of Texas.

Industry groups argue that LDTs are already regulated under the Clinical Laboratory Improvement Amendments (CLIA) program by the Centers for Medicare & Medicaid Services (CMS), making the FDA rule duplicative. However, the FDA maintains that the two regulatory systems are complementary: CLIA oversees laboratory operations, while the FDA regulates separate critical activities involving the design, development, and manufacturing of the test itself. The agency argues that as LDTs become increasingly complex, the associated risks rise, necessitating more rigorous oversight.

Although the final rule has taken effect, laboratories are not waiting for the legal outcome and have already begun planning for compliance.

At Yale School of Medicine, the Department of Laboratory Medicine is "all hands on deck" to prepare for the new FDA requirements, said Alexa Siddon, director of the molecular diagnostics and flow cytometry laboratories. "We are trying to provide timely and personalized care to patients, so this ruling is quite concerning for us," Siddon said. "We want to be as prepared and up to date as possible so there is no interruption in patient care."

Siddon said the lab is still waiting for more FDA guidance on implementation. Staffing to handle the additional workload is another challenge for labs. "We don't fully understand the scope yet, but we first need experts familiar with FDA requirements to help us streamline submissions to the FDA," Siddon said. She noted that each submitted test incurs associated fees and requires personnel to register these tests.

The FDA is hostinga series of webinarsand plans to issue additional guidance documents on specific topics,to help laboratories understand and comply with the new rule, the agency spokesperson said in an email statement. Siddon also noted that the FDA may need to hire additional staff to oversee all laboratories, "so we may be competing for the same pool of potential candidates."

Adam Schechter, CEO of medical testing giant Labcorp, pointed out the risk of potential disruption to patient care during an August earnings call: "The question is whether the FDA has the capacity to approve these tests quickly enough so that all patients can access these important tests as soon as possible."

As laboratories navigate uncertainty over the rule's impact, lab executives shared advice in interviews with MedTech Dive on establishing processes to meet the agency's timeline. Here are five steps laboratories can take now to prepare for the FDA directive:

1. Establish a complaint or adverse event handling system

The final rule phases out the FDA's previous "enforcement discretion" approach to LDTs in five stages over four years. Phase 1, effective May 6, 2025, requires compliance with medical device reporting, correction and removal reporting, and maintaining complaint files.

With the first deadline approaching, clinical laboratories are trying to clarify which situations require recalls, corrections, or removal of products from the market. "The lines are very blurry for me right now, and I think there is room for further clarification on what is or isn't expected," said Jonathan Genzen, chief medical officer at ARUP Laboratories at the University of Utah. Laboratories will have to report to the FDA following the manufacturer pathway, which is distinct from adverse event reporting responsibilities related to accreditation programs. "As a group, we need to learn how to conduct the evaluation process in the way the FDA expects so that we don't have issues in future audits," Genzen said. Nevertheless, Genzen called Phase 1 the "least burdensome" of the five phases because it only applies when problems are identified and does not affect all laboratory tests.

2. Prepare for later phases in advance

Phase 2 will introduce registration and listing, labeling, and investigational use requirements, effective May 2026. Genzen said compiling this data could be a greater burden than Phase 1. "For many institutions, this will be a significant workload, especially for those with a large number of LDTs, and the FDA has not clearly specified how this information needs to be submitted," Genzen said. Still unknown are the type of system intended for use, or how device identifiers (included in other labeling applications) will relate to LDTs. Registration fees are also a consideration, and Genzen noted that some labs may lack the personnel to further develop tests. "That may be the stage where some labs decide to withdraw tests from the market," Genzen said.

3. Avoid rework of LDTs in development

Many LDT development efforts currently underway in laboratories will be subject to FDA requirements in three to four years. Phase 3 will implement quality system procedures, with a deadline of May 2027. The FDA will enforce premarket review compliance for high-risk LDTs in Phase 4 (effective November 2027) and for moderate- and low-risk LDTs in Phase 5 (effective May 2028). "If we ignore these now and say that's for later, we will end up having to do a lot of rework," said Stephen Master, chief of the Division of Laboratory Medicine at Children's Hospital of Philadelphia. Master noted that the FDA's design control approach in the validation process is very different from the framework laboratories are accustomed to under CLIA regulations. "Figuring out how to comply and building the compliance infrastructure is really one of the main challenges laboratories face right now," Master said.

4. Bring in expert support

Inga Rose, CEO of Reference Medicine, said FDA submissions require extensive additional documentation and monitoring. Ensuring FDA compliance means building a team that can include full-time employees and consultants with experience in key areas. Laboratories need people familiar with premarket approval and 510(k) submissions, as well as a quality team independent of the CLIA team. Statisticians, process engineers, and experts in software validation, bioinformatics, and laboratory operations can provide other specialized skills. "Laboratories should be prepared to consider bringing in external consultants in these different areas," Rose said. Genzen of ARUP Laboratories advises lab directors to meet early with colleagues in their organization's compliance departments to determine who will ultimately manage the process. "You really need to address this upfront to avoid doing a lot of preliminary work," Genzen emphasized.

5. Watch for exemption provisions

Under the new framework, LDTs that are already on the market or intended to meet unmet needs willcontinue to fall under the FDA's enforcement discretion approach. AHA's Hughes said the FDA's decision to exercise limited enforcement discretion for currently marketed LDTs "rightly recognizes that applying its full device regulations to these tests would likely prompt many hospital laboratories, especially smaller ones, to stop offering safe and effective tests that patients and their communities rely on." "The enforcement discretion in this final rule is particularly important," Hughes said. "We also welcome the agency's focus on gaps in FDA-authorized commercial tests in meeting certain patient needs, such as rare diseases or specific conditions." LDTs approved through the New York State Department of Health's Clinical Laboratory Evaluation Program are also exempt from FDA premarket review requirements.

For early-stage companies lacking resources to invest in the FDA approval process, "it will hurt them," said Rose of Reference Medicine. "There may be new PhDs from universities with brilliant ideas for treating new diseases, but for them, going through the entire process may feel insurmountable." Exemption provisions for small and startup laboratories, as well as planned discounts on registration and submission fees, could help. "As we get more guidance, I think we will see other considerations around this," Rose added. "How all of this will work is still being clarified."