Preliminary Calendar Year (CY) 2027 Medicare Clinical Laboratory Fee Schedule Payment Rates

Billing & payments Medicare Parts A & B Share Preliminary Calendar Year (CY) 2027 Medicare Clinical Laboratory Fee Schedule Payment Rates The Centers for Medicare & Medicaid Services (CMS) posted preliminary weighted median private payor rates for certain clinical diagnostic laboratory test codes, marking a key step toward setting Medicare's calendar year (CY) 2027 payment rates under the Clinical Laboratory Fee Schedule (CLFS). This preliminary data reflects the second full data collection and reporting cycle for most tests required under the Protecting Access to Medicare Act of 2014 (PAMA), and CMS is inviting public comment before finalizing CY 2027 rates. Protecting Access to Medicare Act of 2014 (PAMA) Section 216(a) of PAMA changed how Medicare sets payment rates for clinical diagnostic laboratory tests. Before PAMA, tests generally were paid the lesser of billed charges, the fee schedule established by the Medicare contractor or the national limitation amount, which is a percentage of the median of the local fee schedule amounts as described in section 1833(h) of the Social Security Act (the Act). PAMA moved CMS to a market-based payment system that ties Medicare payment rates to the rates private payors actually pay for the same tests. Under PAMA, as implemented in section 1834A of the Act and CLFS regulations, most laboratories that meet certain revenue thresholds — known as “applicable laboratories” — must collect and report certain private payor rate and volume data to CMS during defined data collection and data reporting periods. CMS uses this data to calculate weighted median private payor rates, which is generally the basis for Medicare's CLFS payment rates for most tests.  Section 1834A of the Act includes different requirements for new clinical diagnostic laboratory tests and advanced diagnostic laboratory tests. The first round of PAMA-based data collection took place in 2016, which was reported in 2017 and which generally became the basis of Medicare’s CLFS payment rates in 2018. Congress enacted several laws delaying the next full reporting cycle. Most recently, the Consolidated Appropriations Act, 2026 revised the data reporting period, data collection period, and requirements for the phase-in of payment reductions , requiring the second round of data reporting to occur in 2026. CMS used data reported during the 2026 reporting period to establish the preliminary CY 2027 rates. Clinical Laboratory Fee Schedule (CLFS) The CLFS is the payment system Medicare uses to pay laboratories for clinical diagnostic laboratory tests, such as blood tests, urinalysis, and molecular and genomic tests. Payment rates are set annually and updated under the framework established in section 1834A of the Act, which generally requires that CLFS rates for most tests be based on the weighted median of private payor rates for each test, weighted by test volume. Additionally, there are procedures for determining the basis for, and amount of, payment for new tests as described in 18333(h)(8) of the Act. Data Reporting Requirements Under the CLFS, reporting entities generally submit “applicable information” collected during a data collection period on behalf of their component applicable laboratories. This information includes private payor rates, the volume of tests paid at each rate, and the specific Healthcare Common Procedure Code System (HCPCS) code for each test. The data collection and reporting timeline for this round (as established by the Consolidated Appropriations Act, 2026 and reflected in section 1834A of the Act): Data collection period: January 1, 2025 – June 30, 2025 Data reporting period: May 1, 2026 – July 31, 2026 Methodology The weighted median is calculated by arraying the distribution of all private payor rates, weighted by the volume for each payor and each laboratory. CMS took quality control measures to address potentially unreliable private payor data. The following records were removed from the calculation: Duplicate records: Reported records where the TIN, NPI, HCPCS code, payment rate, and volume (if greater than 1) exactly match another record. Outlier records: Records where the reported payment rate exceeds 100 times the CY 2026 CLFS payment rate for that test. For transparency, CMS is publishing the preliminary payment rates with and without these exclusions and is requesting public comment on whether this approach is appropriate for calculating the final weighted median private payor rates. Key Statistics From This Data Reporting Cycle Measure Result Laboratories (NPIs) that submitted data 6,411 Applicable laboratories used after exclusions 6,304 Total applicable HCPCS codes 1,947 Codes with a weighted median from private payor data 1,528 (78.5%) Average potential change to CY 2026 CLFS rates ~16% lower Of the approximately 1,500 codes with a weighted median from private payor data: 186 codes have a higher weighted median compared to the CY 2026 CLFS rate. 169 codes have an equal we