The laboratory, CBLPath, serves about 2,700 physician specialists and patients nationally.
Of course, the woman is suing CBL Path, but what can be the compensation for the traumatic loss she has undergone?
The victim, Darrie Eason, a 35-year-old single mother from Long Beach, N.Y., told ABC's Good Morning America, "I remember the words, 'You don't have breast cancer, you never did.'"
A CBLPath technician who handled Eason's test admitted to his supervisors that he "occasionally cut corners by batching," or handling more than one tissue sample at a time, and did not always verify patients' initials when labeling them, according to a New York state Health Department report issued in August 2006.
The regulatory agency found "no systemic problems" and therefore did not cite the company, Health Department spokeswoman Claire Pospisil said.
"That's unbelievable," said James Baydar, one of Eason's attorneys. "This is a system failure. Somewhere along the line - because someone cut corners - Darrie has to live with the consequences of the scars and the emotional turmoil that she continues to go through."
Eason filed a lawsuit in state Supreme Court in Mineola last month seeking an undisclosed sum of money.
She chose not to sue her surgeons because they received faulty test results, Baydar said.
William Curtis, chief executive officer of CBLPath, would not answer questions from reporters. The company issued a written statement late Thursday afternoon acknowledging the case and the state's investigation.
"Our hearts and thoughts go out to Ms. Eason and her family involving this incident," Curtis said in the statement. "While we cannot comment directly on this case as it is in litigation and out of concern for patient privacy, CBLPath is dedicated to delivering highly accurate diagnostic test results to our physician-clients that better enable them to provide enhanced patient care."
Eason was diagnosed with lobular carcinoma and underwent a complete double mastectomy in May 2006 at Long Beach Memorial Hospital. About 10 days later she was told to return to see her doctor because no cancer cells were found in the tissue removed from her breasts.
After additional blood tests and DNA testing, doctors confirmed that her breast tissue was benign and she did not have cancer, Baydar said.
Eason isn't the first person to fall victim to a devastating, preventable medical mistake. Studies show that between 40,000 and 100,000 Americans die every year from improper medications to errors on the operating table.
Dr. Robert Wachter, author of "Understanding Patient Safety," said, "That would be the equivalent of a large jet crashing every single day in the United States."
Wachter said there have to be backup systems that anticipate human error. "You have to create technologies that anticipate that humans will blow it from time to time and catch the errors before they kill someone," Wachter said.
In the meantime, the woman whose biopsy slide was mixed up with Eason's did indeed have cancer, and was not told immediately.
"I don't know who," Eason said of the other woman. "I don't know when they found out. I don't know if they know."
Eason said she learned a valuable lesson from her terrible experience.
"Second opinions are good but second biopsies are better."