Withdrawal of LDT Rule Provides Regulatory Clarity and Reimbursement Guidance for Laboratories
In a landmark turn of events, the FDA is formally rescinding its controversial Laboratory Developed Test (LDT) final rule. This decisive action brings to a close a regulatory battle that has stretched across more than three decades, shaping the landscape for how laboratory testing services are regulated in the United States.
While the Final Rule itself was only published in 2024, the roots of this decision run deep. The controversy over whether the FDA has the authority to regulate LDTs as medical devices began in the early 1990s, setting off decades of legal debate, stakeholder lobbying, and shifting agency priorities. Understanding this history is key to seeing why the rescission is such a significant milestone—and why it’s being described as the end of a chapter more than 30 years in the making.
A Three-Decade Regulatory Journey
The rescission isn’t about a single rule. It’s the endpoint of a regulatory tug-of-war that began in the early 1990s. Here’s how we got here:
In August 2025, the Office of Information and Regulatory Affairs (OIRA) published notice of the formal rescission, initiating its review under Executive Order 12866—a procedural step that officially marked the rule’s withdrawal from the regulatory landscape.
This followed the March 2025 decision by the U.S. District Court for the Eastern District of Texas, which struck down the rule entirely, finding that the FDA exceeded its statutory authority. The court ruled that LDTs (services performed within a single laboratory) are not “devices” under the FD&C Act.
Formally rescinding the final rule closes a chapter that has dragged on for far too long. The administration is confirming that LDTs are not devices under the FD&C Act, and that the FDA exceeded its authority. It’s a critical win for laboratories and for the regulatory clarity needed to move forward.
The decision also restored the longstanding division of authority:
- CMS/CLIA – Oversight of LDTs
- FDA – Oversight of IVD test kits, specimen collection devices, analyte-specific reagents (ASRs), and research use only (RUO) products
For laboratories, the outcome brings long-awaited stability. "This development brings regulatory clarity to laboratories that have struggled with frequent changes in reimbursement policies,” said Catherine Sicker, Corporate Compliance Officer at Quadax. “Although the FDA’s authority has been scaled back, laboratories must still comply with CLIA regulations and remain subject to oversight concerning component-level devices. This serves as a reminder that ongoing diligence in regulatory compliance is critical.”
Looking Ahead
The rescission of the LDT final rule ends one of the longest-running disputes in U.S. diagnostic regulation. But the debate over how best to ensure test quality and patient safety is far from over. Legislative proposals like the VALID Act, or potential future rulemaking, could still alter the regulatory environment.
At Quadax, we know regulatory shifts can affect every part of a lab’s operations. We track the developments that matter most by turning court rulings, legislation, and policy changes into clear, actionable guidance. By optimizing reimbursement strategies, we help labs navigate challenges, mitigate risks, and adapt to change, so they can focus on patient care.
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About Christine Bump / Penn Avenue Law & Policy: Christine P. Bump is the principal and founder of Penn Avenue Law & Policy, a law firm dedicated to advising diagnostics companies, laboratories, and life sciences organizations on complex regulatory and legislative issues. With more than two decades of experience at the intersection of healthcare law, policy, and compliance, Christine provides strategic counsel on regulatory strategy, reimbursement, and advocacy. Her expertise helps clients navigate evolving federal and state oversight while positioning them for long-term success in a highly regulated industry. Learn more at pennavenuelaw.com.
