Direct-to-consumer genetic-testing companies who were served cease-and-desist letters by the state of California responded this week. Some insisted that they are in compliance with state laws, and others closed their doors to Californians. Both 23andMe and Navigenics, two high-profile, California-based startups offering a new breed of genome-wide screening services, say that they will continue to operate in the state.

The letters demanded that companies offering genome screening services directly to consumers comply with state regulations for medical testing, which means that the tests must be performed in certified laboratories and be ordered by a physician. A spokeswoman for the Department of Public Health, which issued the letters, said that the action was in response to customer complaints. On Tuesday, the department released the names of the 13 companies that had been served letters. That list includes well-known companies like Navigenics, 23andMe, and Decode, based in Reykjavik, Iceland. All three companies scan the entire genome for specific genetic variations linked to disease and then tabulate the results to offer customers a calculation of their genetic risk for various diseases. Also included on the list are lesser-known companies that offer an assortment of testing, such as screening for a gene linked to hair loss and nutritional advice based on one’s genome.

At issue is whether these tests constitute clinical information. Unlike genetic tests for simple genetic diseases, such as Huntington’s, in which a specific genetic mutation guarantees that the bearer will develop the disease, the genome tests use the recent flood of genetic information to try to predict the likelihood that someone will develop a certain disease. Theoretically, this would allow him or her to take steps to prevent the disease; someone at risk of heart disease might take statins, for example.

The California kerfuffle, which follows similar action in New York, highlights the continuing regulatory confusion surrounding the fledgling industry. “Existing regulations don’t really contemplate the nature of a whole genome scan,” says Mari Baker, Navigenics’s president and chief operating officer. “And it’s unclear as to what regulatory body this should fall under.”

Both Navigenics and 23andMe, which released a statement but declined further comment, say that they are in compliance with the law, using state-certified laboratories and employing the services of a physician when ordering tests. “We’ve been surprised and confused by this action,” says Baker. “We spent a significant amount of time before we launched our service analyzing and putting in place processes to comply with the regulations.” Thus far, the state has declined to comment on its plans, which could include legal action.

Baker argues that Navigenics provides an information service and thus should not be considered a clinical laboratory. The company collects DNA samples from clients and sends them for processing to Affymetrix, a California-certified genetics technology company. The resulting data file, which contains information on a series of genetic variations, is then analyzed by the company to determine an individual’s risk for different diseases. Whether that argument will pass muster is likely to be debated at the federal level next month. A conference convened by Mike Leavitt, secretary of the Department of Health and Human Services, will review oversight of genetic testing, particularly the issue of whether these services constitute clinical test results or simply provide health information. The secretary’s advisory committee will also review recommendations proposed in a recent report, which recommends that the Food and Drug Administration oversee all genetic testing. Currently, so-called laboratory tests, which include many genetic tests, are exempt from FDA regulation.