The FDA’s Final Rule on LDTs and What It Means for Independent Medical Labs (Updated)

Article Update: Clinical laboratories across the U.S. continue to closely monitor the fate of Laboratory-Developed Tests (LDTs) after a March 2025 decision in U.S. district court ruled in favor of the American Clinical Laboratory Association (ACLA) and the Association for Molecular Pathology (AMP), with both organizations successfully arguing that the Food and Drug Administration (FDA) exceeded its authority by classifying LDTs as medical devices under its 2024 rule.

Following this ruling, three possible paths now lie ahead for LDT regulation:

The Trump Administration Appeals the Decision:
Given the administration’s history of aggressively appealing rulings, an appeal remains possible. The FDA’s rule was published during the Biden administration, but Trump’s Department of Justice had defended the rule in court. No formal decision to appeal has been announced.

The FDA Revises and Reissues the Rule:
The court remanded the matter to the U.S. Department of Health and Human Services, leaving the door open for the FDA to craft a revised rule. Alternatively, Congress may revisit legislation such as the VALID Act, which previously sought to increase LDT oversight but failed to pass.

The Administration Takes No Further Action:
The Trump administration could abandon further rulemaking and revert LDT oversight to the existing Clinical Laboratory Improvement Amendments of 1988 (CLIA) framework. This approach aligns with the FDA’s prior use of “enforcement discretion.”

The court’s decision is a significant development for clinical laboratories, many of which opposed the FDA’s rule. Industry stakeholders are watching closely to see what the federal government does next.

Source: Dark Daily, “Three Possible Scenarios for LDT Regulation after Historic Court Decision Vacates FDA Final Rule,” April 2, 2025.

Editor’s Note: The following blog post, originally published on June 7, 2024, covers the FDA’s final rule (announced on May 6, 2024) that placed laboratory-developed tests under the definition of “medical devices,” subjecting them to new premarket review and compliance requirements. It also covers how the rule may increase lab operational costs, requiring additional staff and compliance resources. 

FDA’s Final Rule on LDTs: New Compliance Requirements and Costs for Clinical Labs

A final rule recently issued by the U.S. Food and Drug Administration (FDA) directly affects the oversight of laboratory-developed tests (LDTs) and the individual clinical laboratories and pathology practices that develop, validate, and perform them.

As part of the final rule, the FDA amended its regulations and clearly stated that LDTs fall within the definition of “device” under the Federal Food, Drug, and Cosmetic Act (“FD&C Act). This means LDTs are now subject to new premarket review and postmarket compliance requirements enforced by the FDA. 

LDTs on the market before the final rule announcement will be partially exempt from the FDA application and clearance process but will still face some FDA oversight requirements. New LDTs are required to go through the full FDA application and clearance process. 

The final rule goes into effect on July 5, 2024.

So what does the final rule and FDA oversight mean for clinical laboratories going forward? 

In this blog post we’ll cover partial “grandfather” exemptions for existing LDTs on the market, how the FDA plans to phase out its general enforcement discretion approach over the next four years, what this new oversight likely means in terms of added lab costs to remain compliant, and what steps a laboratory can take to make FDA compliance less of a burden. 

Partial Grandfather Exemptions for Existing LDTs and the FDA’s Phaseout Policy

For lab leaders searching for a good source of information about the final rule and its implications, there’s the FDA’s Laboratory Developed Tests web page plus a link to Frequently Asked Questions. 

Another excellent source of information is the May issue of Laboratory Economics featuring President/Publisher Jondavid Klipp. 

According to Klipp, currently marked LDTs (on the market before May 6, 2024) must comply with stages 1 and 2 of the FDA’s five-stage phaseout policy as the administration moves from general enforcement discretion to greater oversight over the next four years. After the four-

year phaseout (beginning on May 6, 2028), all LDTs will generally be expected to meet all FDA-applicable requirements.

Here are the five stages that all clinical labs must be aware of (source: Laboratory Developed Tests - Phaseout Policy).

• Stage 1: Beginning on May 6, 2025, the FDA will expect compliance with medical device reporting (MDR) requirements, correction/removal reporting requirements, and quality system (QS) requirements regarding complaint files.
• Stage 2: Beginning on May 6, 2026, the FDA will expect compliance with requirements not covered during other stages of the phaseout policy, including registration and listing requirements, labeling requirements, and investigational use requirements.
• Stage 3: Beginning on May 6, 2027, the FDA will expect compliance with QS requirements (other than requirements regarding complaint files already addressed in stage 1).
• Stage 4: Beginning on November 6, 2027, the FDA will expect compliance with premarket review requirements for high-risk IVDs offered as LDTs (IVDs that may be classified into class III or that are subject to licensure under section 351 of the Public Health Service Act), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review.
• Stage 5: Beginning on May 6, 2028, the FDA will expect compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs that require premarket submissions, unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review.

Based on expert interpretation from industry experts, the FDA now considers a test on a human sample that produces an individually identifiable result to be the definition of a laboratory-developed test.  

How Will the FDA’s Final Rule Affect Laboratory Finances?

Many experts say the FDA’s final rule needs more nuance. In addition to the what-ifs and unanswered questions, some believe the rule could soon be subject to a legal challenge. Others have suggested Congress could act on behalf of the laboratory community (like reintroducing the VALID Act or other new legislation) because the rule will hinder innovative new testing methods and delay access to patient care.

While all that remains to be seen, what’s evident now is that FDA oversight in its current form will cost labs more. Experts anticipate that labs will have to add full-time equivalent (FTE) employees and create new departments focused solely on LDT compliance. 

Going back to the May issue of Laboratory Economics, Christine Bump, a Penn Avenue Law & Policy Regulatory Attorney, says small labs should budget 1-2 FTEs, and labs offering 50 or more LDTs should budget for 4-5 FTEs. She also believes that labs may need to retain outside counsel and consultants (such as software experts and regulatory/quality experts) to help develop and implement systems and prepare the necessary compliance documentation.

To ensure compliance, many growing labs must consider upgrading their laboratory workflow management and diagnostic lab software to mitigate potential risk.

Bump stresses that labs must start planning to comply with stages 1 and 2 of the FDA’s final rule now because failure could result in FDA inspections and penalties. In extreme cases, she says the FDA could also shut down facilities and fine companies and executives.

Editor's Note: The American Clinical Laboratory Association (ACLA) and its member company, HealthTrackRx, have filed a lawsuit challenging the FDA's final rule.

Learn More: ACLA Challenge To FDA’s Final Rule Regulating Laboratory Developed Testing Services As Medical Devices

Building the Ideal Laboratory Information System Software Solution: Supporting Compliance, Efficiency, and Quality

Even before the FDA’s final rule on LDTs, clinical laboratories and pathology practices were under extreme pressure to maintain high-quality standards while ensuring operational compliance. Now, more than ever, it’s clear that medical labs need to modernize and deploy comprehensive LIS systems/laboratory information system software to address current challenges and the final rule. 

“Although the new regulations aren’t as harsh as originally proposed and seek to enhance the quality and safety of LDTs, FDA oversight will result in an added layer of bureaucracy and cost for medical labs,” said LigoLab CEO Suren Avunjian. “Because of this, comprehensive, adaptable, and robust medical LIS software solutions with features designed to help labs navigate the complexities of the new rule will be even more in demand.”

Learn More: Laboratory Information Systems Are Not Commodities!

Below is a detailed overview of the key laboratory information system functions and components needed to support modern laboratory requirements and clinical lab workflow.

Compliance Management

One of the most significant challenges for laboratories today is navigating the maze of regulatory requirements. An ideal LIS system software solution must have robust compliance management features to keep labs informed and aligned with evolving standards.

• Regulatory Tracking: By integrating real-time feeds from relevant regulatory bodies, laboratories can stay updated on changes, deadlines, and new guidelines. Automated alerts and notifications can be configured to inform personnel of upcoming compliance tasks.
• Document Control: Secure management of standard operating procedures (SOPs), validation records, and quality control documentation is essential. The LIS software should offer version control, audit trails, and access logs to ensure document integrity.
• Audit Trail: This functionality provides comprehensive and transparent tracking of all user activities within the lab information system. This feature ensures complete traceability by recording every real-time action, including data modifications, user access, and system changes. 

Learn More: A Detailed Look at How Modern Laboratory Information Systems Fully Support Quality Control

Data Management and Integration

Laboratory data management has to be centralized and interoperable to maintain integrity and accessibility across various laboratory software systems.

• Centralized Data Repository: A unified LIS system database consolidates test results, patient records, and sample tracking, enabling easy access and efficient management of laboratory data.
• Integration with Existing Systems: Compatibility with hospital and laboratory software systems, such as electronic health records, instrument interoperability, and laboratory billing/lab revenue cycle management software, allows for smooth data transfer and minimizes errors associated with manual data entry.
• Cloud-Based Solutions: Cloud storage provides scalability and ensures data availability. Robust encryption protocols and backup systems are critical for data security.

Industry Insights: Examining the Pros and Cons of Cloud-Based LIS System Solutions

Sample Management

Accurate and timely sample tracking is crucial for maintaining reliability and patient trust.

• Barcoding and Tracking: Automated sample identification using barcodes ensures each sample is accurately tracked throughout its lifecycle, minimizing errors.
• Workflow Automation: Alerts and notifications keep staff updated on the status of samples and testing stages, reducing delays and improving transparency.

Test Validation and Quality Control

Quality and reliability are key components of laboratory testing. 

• Validation Tools: LIS system tools should guide laboratories through test validation processes that comply with regulatory standards.
• Quality Control Modules: Advanced QC modules can compare test results against control samples to identify anomalies and ensure consistency.

Reporting and Analytics

Comprehensive reporting and data analysis drive better decision-making and streamline compliance.

• Customizable Reporting: Laboratories should be able to generate reports that meet internal needs, client demands, and regulatory requirements, including audit-ready formats for FDA inspections.
• Advanced Analytics: Data analytics can uncover trends, predict equipment failures, optimize resources, and provide actionable insights to improve efficiency.

Learn More: How LigoLab's Pathology Lab Software Supports Lab Report Customization and Client Preferences

User Access and Security

Secure and customizable access is vital for protecting sensitive data.

• Role-Based Access Control (RBAC): Role-specific permissions ensure data is accessible only to authorized personnel.
• Data Encryption and Security: Strong at-rest and in-transit encryption ensures that sensitive patient data remains protected from breaches.

Learn More: LigoLab’s Enhanced Cybersecurity Solutions Give Customers Added Protection and Peace of Mind

Support and Scalability

As laboratories grow, their laboratory information system/pathology lab software solutions should scale seamlessly.

• Technical Support: Responsive customer support assists with training, troubleshooting, and timely updates.
• Scalability: The lab information system must handle increased test volumes without significant re-investment, adjusting to growing needs.

User Interface and Usability

A user-friendly lab information system design is crucial to ensure adoption and minimize errors.

• Intuitive Interface: A user-friendly interface with easy navigation reduces training time and error rates.
• Mobile Compatibility: Mobile compatibility provides staff with flexible access to the LIS system, enhancing productivity.

The FDA’s final rule means significant changes to how laboratory-developed tests are created, validated, and utilized across the healthcare continuum. Organizations must adhere to stricter validation processes, submit detailed documentation, and undergo regular inspections to remain compliant. 

This move from the FDA is intended to increase the reliability of LDTs, but it also presents a challenge in terms of laboratory compliance and operational adjustment.

To effectively support medical laboratories, laboratory information system companies must continue to push the limits of comprehensive, adaptable, and robust LIS pathology solutions.

LigoLab’s All-in-One LIS & RCM Laboratory Informatics Platform

LigoLab Informatics Platform is an all-in-one laboratory information system and laboratory revenue cycle management (lab RCM) solution designed to help pathology groups and clinical labs digitally transform into modern, efficient organizations that are more productive and profitable. 

LigoLab’s enterprise-grade LIS software platform features all of the functionality listed above, plus modules for anatomic pathology (LIS pathology), clinical laboratory (LIS medical), molecular diagnostics (LIS molecular), laboratory billing, and direct-to-consumer lab testing (TestDirectly and TestDirectly.com). 

All modules and features are embedded within an integrated database and LIS software infrastructure that eliminates data silos and efficiently manages all departments and operations with maximum interoperability. 

Learn More: Navigating the Future of Pathology: The LigoLab Advantage

Ready to see how LigoLab’s comprehensive and flexible medical LIS and lab billing platform can digitally transform your organization? Contact our team today and start a conversation.

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