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Esoteric Tests Coding and Billing Expert Witness

Michael Arrigo, Managing Partner of No World Borders, advises prospective investors in esoteric testing and serves as an expert witness in Federal, State, and Civil courts on laboratory testing business models, the Clinical Laboratory Improvement Amendments (CLIA), medical billing, and medical coding. He is trained in medical coding for clinical pathology and in recognizing specimen interference in clinical laboratories. He also provides testimony regarding the Affordable Care Act, HIPAA, usual, customary, and reasonable (UCR) charges in malpractice and personal injury matters, False Claims Act cases involving Medicare Advantage, and Electronic Health Records.

Esoteric testing expert witness work on coding and billing includes reviewing test charge amounts against national and regional charge averages; evaluating National Correct Coding Initiative (NCCI) standards, code modifiers, medical necessity criteria, and clinical documentation; applying Medically Unlikely Edits (MUEs); and assessing the cost of care based on national and regional rates. Depending on the jurisdiction and type of litigation, UCR charges or net payments by insurance may serve as the applicable standard. The collateral source rule in some states precludes evidence of insurance in personal injury cases.

What Is Esoteric Testing?

Esoteric tests are the analysis of rare, complex, or “niche” substances and molecules not routinely performed in standard clinical laboratories. They typically require specialized personnel, advanced instrumentation, and methods such as molecular assays, mass spectrometry, immunoassays, and next-generation sequencing. As medicine moves toward precision and personalized treatment, the volume of esoteric and genomic testing continues to rise, driven by population growth, the aging population, and an increasing number of tests per patient.

Categories of Esoteric Tests

Esoteric tests are generally considered to include Biochemical Genetics, Cytogenetics/FISH, Flow Cytometry, Microbiology, Molecular Genetic Pathology, Red Blood Cell (RBC) studies, Special Studies, Special Coagulation, and Virology. Their clinical applications span Infectious Disease, Endocrinology, Oncology, Toxicology, Immunology, and Neurology.

Esoteric Testing Market Growth

Determining usual, customary, and reasonable costs for esoteric tests — or for any emerging area of medicine — requires careful analysis that presents data representative of market rates within a specified Core Based Statistical Area (CBSA). A CBSA is a U.S. geographic area defined by the Office of Management and Budget (OMB) consisting of one or more counties anchored by an urban center of at least 10,000 people, plus adjacent counties socioeconomically tied to that center by commuting. Identifying providers who perform comparable tests in a similar time frame and setting may also be relevant, and NCCI algorithms can be used to confirm that charges are not improperly unbundled.

The esoteric testing market remains a strong growth sector. Estimates vary by research house, but as of 2026, most place the global market in the range of roughly USD 30–41 billion, with multi-year forecasts pointing to roughly USD 75–92 billion by 2033–2034 at compound annual growth rates between approximately 8% and 11%. For example, Fortune Business Insights values the market at about USD 32.6 billion in 2026, growing to roughly USD 75.9 billion by 2034 (CAGR ~11.1%); Precedence Research projects about USD 41.1 billion in 2026 rising to roughly USD 92.6 billion by 2034 (CAGR ~10.7%); and Coherent Market Insights estimates about USD 35.8 billion in 2026 reaching roughly USD 76.7 billion by 2033 (CAGR ~11.5%). North America consistently accounts for the largest regional share, generally reported in the 40%–45% range.

Growth in this market is primarily driven by:

The increasing burden of chronic diseases, due in part to the aging population
Rising prevalence and earlier diagnosis of infectious diseases
Growing demand for early disease detection using specialized assays
The expansion of personalized and precision medicine, particularly molecular diagnostics and oncology genomics
Increasing public and private funding for research and development of innovative esoteric tests

The COVID-19 pandemic was an earlier accelerant for esoteric testing, expanding demand for SARS-CoV-2 RT-PCR and serology assays and drawing research attention to links between severe COVID-19 and microvascular inflammation and thrombosis. While that surge has normalized, it demonstrated how quickly a new clinical need can reshape testing volumes, reimbursement questions, and compliance exposure — the same dynamics now driving molecular and genomic testing.

What an Esoteric Tests Expert Witness Analyzes

Beyond confirming charge reasonableness, expert analysis of esoteric test billing typically examines how the tests were coded and whether the codes match the documented work performed. Key areas include:

Code selection. Whether claims used the correct CPT pathology and laboratory codes, Proprietary Laboratory Analyses (PLA) codes, or Multianalyte Assays with Algorithmic Analyses (MAAA) codes for proprietary and algorithm-based esoteric assays.
Code stacking and unbundling. Whether component codes were improperly billed separately when a single comprehensive or panel code applied, tested against NCCI Procedure-to-Procedure edits.
Medically Unlikely Edits (MUEs). Whether units billed exceeded the maximum reasonably reported for a single date of service.
Medical necessity and documentation. Whether the clinical record supports the test ordered, including coverage criteria under applicable Local Coverage Determinations (LCDs).
UCR and rate benchmarking. Comparison of billed charges to national and regional benchmarks within the relevant CBSA, and, where the jurisdiction allows, to net insurer payments.

Regulatory Framework and Risk Management

Esoteric testing laboratories are generally subject to the following frameworks, each of which can bear on coverage, reimbursement, and compliance disputes:

CLIA (Clinical Laboratory Improvement Amendments). Administered by CMS, CLIA governs the quality and accuracy of laboratory testing. Notably, following the 2025 court ruling discussed below, CLIA remains the operative federal framework for laboratory-developed tests.
HIPAA, the HIPAA Omnibus Rule of 2013, and the HITECH Act of 2009. These govern the privacy and security of Protected Health Information (PHI), including how test results are stored and reported.
The CMS MolDX Program and Z-Codes. For molecular diagnostic services, the MolDX program ties Medicare payment to demonstrated clinical utility and requires registration of tests through unique DEX Z-Code identifiers — a frequent focal point in medical necessity and reimbursement disputes.
PAMA and the Clinical Laboratory Fee Schedule (CLFS). The Protecting Access to Medicare Act established market-based pricing for laboratory services, which informs UCR and reasonableness analyses.
The No Surprises Act. For out-of-network laboratory claims, its protections and independent dispute resolution process can interact with UCR and out-of-network payment determinations.

FDA Laboratory-Developed Test (LDT) Rule: Current Status

In May 2024, the FDA issued a final rule that would have regulated laboratory-developed tests as medical devices and phased out the agency’s long-standing enforcement discretion. On March 31, 2025, the U.S. District Court for the Eastern District of Texas, in American Clinical Laboratory Association v. FDA (consolidated with Association for Molecular Pathology v. FDA), vacated the rule in its entirety, holding that the FDA lacked statutory authority under the Federal Food, Drug, and Cosmetic Act because LDTs are professional testing services rather than manufactured devices. HHS declined to appeal, and the FDA formally rescinded the rule on September 19, 2025. As a result, LDTs — which include many esoteric, genomic, and oncology assays — continue to be regulated under CLIA by CMS rather than as FDA-regulated medical devices. Laboratories and litigants should treat CLIA, not the vacated FDA rule, as the governing standard.

Representative Esoteric Tests

Esoteric test menus are broad and continually expanding. Representative examples, many performed by immunoassay (such as ELISA) or molecular methods, include:

Reproductive and growth-factor assays: Anti-Müllerian Hormone (AMH), Activin A/B/AB, Inhibin A/B, Follistatin, the IGF and IGFBP families, and BMP-15/GDF-9 complexes.
Metabolic and endocrine markers: C-Peptide of Insulin, Glucagon, GLP-1, GLP-2, and Oxyntomodulin.
Pregnancy and oncology-associated markers: PAPP-A and PAPP-A2, Stanniocalcin 2, and IGF-II.
Neurology and infectious disease: Myelin Basic Protein (MBP) and SARS-CoV-2 serology (IgG/IgM).

Frequently Asked Questions

What does an esoteric testing expert witness analyze?

An esoteric testing expert reviews coding accuracy (CPT, PLA, and MAAA codes), NCCI unbundling and MUE compliance, medical necessity and documentation, applicable LCDs, and whether billed charges are usual, customary, and reasonable within the relevant CBSA — as well as the underlying laboratory business model and CLIA compliance.

What standards apply to esoteric and laboratory test billing?

Common standards include CLIA for testing quality, NCCI edits and MUEs for coding integrity, LCDs for medical necessity, the CMS MolDX program and Z-Codes for molecular diagnostics, the PAMA-based Clinical Laboratory Fee Schedule for pricing, and UCR or net-payment benchmarks depending on jurisdiction.

Are laboratory-developed tests (LDTs) regulated by the FDA?

Not currently. The FDA’s 2024 rule that would have regulated LDTs as devices was vacated by a federal court in March 2025 and formally rescinded by the FDA in September 2025. LDTs remain regulated under CLIA by CMS.

How is the usual, customary, and reasonable (UCR) charge for an esoteric test determined?

UCR analysis compares the billed charge to national and regional benchmarks for the same or comparable codes within the applicable Core Based Statistical Area, accounting for the test’s complexity, methodology, and the providers performing it in a similar time frame and setting.

Engage an Esoteric Testing Expert Witness

No World Borders provides testifying and consulting expert services on esoteric and laboratory test coding, billing, UCR analysis, CLIA compliance, and laboratory business-model validation. To discuss a matter or request a conflicts check, contact our Newport Beach office or call +1 (949) 335-5580.

About the Author

Michael F. Arrigo is Managing Partner of No World Borders, Inc., a healthcare data, regulatory, and economic consulting firm. He is a court-recognized testifying expert in medical billing and coding, CLIA and clinical laboratory business models, HIPAA Administrative Simplification, EHR certification and forensics, and usual, customary, and reasonable charge analysis. He is trained in medical coding for clinical pathology and in recognizing specimen interference in clinical laboratories, has rendered opinions on more than $2 billion in medical reimbursement, and has survived a Daubert challenge. His firm serves health plans, self-insured employers, and law firms.