Lab test providers are pressing Congress to overhaul Medicare payment rules before proposed cuts take effect next year, warning that the changes could disrupt patient care and financial stability for diagnostic services.
The Centers for Medicare and Medicaid Services (CMS) released a preliminary fee schedule this week that would reduce payments by 15% for 775 lab tests in 2027, according to the American Clinical Laboratory Association (ACLA). The cuts are part of a long-standing process under the Protecting Access to Medicare Act (PAMA), passed in 2014, which was meant to align Medicare rates with private insurer payments. ACLA estimates the full schedule would slash reimbursements for nearly 1,200 tests next year, with further reductions planned for 2028 and 2029.
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The RESULTS Act, a bill introduced in Congress, would replace PAMA’s data collection method with a system using an independent commercial claims database to set rates. Supporters, including Quest Diagnostics and Labcorp, argue the current process is flawed and fails to reflect real-world lab costs. The American Medical Association, American Cancer Society, and American Hospital Association have also backed the legislation.
James Davis, CEO of Quest Diagnostics, said the company is “pushing hard and furious for the RESULTS Act.” He noted that Congress has repeatedly delayed similar reductions in past years. “They would like a long-term fix just like we would,” Davis said. The lab industry is pushing for the RESULTS Act to be included as part of a broader healthcare package at the end of the year, he said.
Qihui “Jim” Zhai, president of the College of American Pathologists, warned that the cuts threaten the stability of lab infrastructure, which relies on accurate and timely diagnoses. “The 2027 fee schedule shows the current payment system is not sustainable,” he said in a statement. Labcorp echoed these concerns, stating that CMS’s proposed rates are based on data that doesn’t fully represent the broader lab market.
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The CMS estimates the changes would save taxpayers $1 billion annually, framing the adjustments as necessary to prevent Medicare from overpaying compared to private insurers. Administrator Dr. Mehmet Oz said, “Taxpayers and Medicare patients have been paying excessive rates to labs for years, but with some help from Congress, CMS is working to ensure that Medicare isn’t paying more than private insurers for the exact same tests.” However, analysts at TD Cowen predict Congress will likely delay the cuts again, as it has in previous years.
CMS’s proposed schedule remains open for public comment until late September, giving stakeholders one last chance to influence the final rates before they take effect. Whether Congress acts before then depends on whether lawmakers can agree on a replacement for PAMA—or whether another round of delays becomes the default.
