Shares of CareDx fell sharply following a proposed local coverage determination (LCD) by Medicare contractor Palmetto's MolDx program that would restrict the number of surveillance tests covered annually for transplant rejection monitoring. The proposal limits testing to fewer timepoints than currently recommended by CareDx, significantly narrowing their market potential. The LCD also calls for stricter clinical validation and questions routine use of combined cell-free DNA (cfDNA) and gene expression profiling (GEP) tests for transplantation. This regulatory shift could reduce CareDx’s transplant diagnostics market by approximately half, impacting its revenue and growth prospects.