Hi S.! I think you have some received some really excellent advice. Following up with the pediatrician seems like a good place to start. I would also request from the teacher some very specific information about which skills are firmly in place and which skills need work. Ask her to be direct and to not sugar coat.
I'm a first and second grade teacher (taking a few years off to be home) and I feel that a first grader should usually end the year knowing all of their letters and sounds easily and be able to read first grade material easily. That said, I'm not necessarily panicked if a child is not reading- so long as he or she has made steady progress throughout the year. Has your son shown steady growth throughout the year? If not, I would be concerned. Request a team meeting with the teacher, specialist, and bring along someone you trust (2 sets of ears are better than one- do you know a retired school teacher or a friend who is good at asking questions?). Get the ball rolling for testing now- it takes a lot of time to get these things going and he probably won't be tested before the year is over- but it will be scheduled for fall at least.
If he has shown steady progress throughout the year, then that's good. Read read read this summer, and do the other things people have suggested on this site. I would also suggest this book: Making Sense of Phonics by Isabel Beck. I used it with a group of second graders who were reading at Kindergarten and first grade levels even though they were almost done with second grade. After 3 weeks, they had made 6 months of progress. No kidding. I know you're busy, but if you could take 20 minutes three days a week, you will see progress. If you get the book and have questions, please contact me. This book is amazing.
In the fall, he should be monitored every 2-3 weeks for progress. If two months go by and he hasn't made progress, then that is the time to request testing for a learning disability.
Good luck- and please let me know if I can offer any other help.
There I went and blathered on and on again. Sorry.
J.