Medicare payments for clinical laboratory services will soon be coming down.

The Centers for Medicare & Medicaid Services is working to bring Medicare’s clinical laboratory services rates into line with those paid by commercial insurers.  Asserting that Medicare is now paying 16 percent more for clinical lab tests than commercial payers, the agency has posted proposed rates for calendar year 2027 that reflect the beginning of what in some cases will be a multi-year process of aligning public and private lab payments – “aligning” by reducing Medicare payments.

Hospital laboratories perform between 40 and 55 percent of laboratory tests.

While Medicare’s official 2027 rates will not be posted until November, CMS estimates that the agency will save about $1 billion a year through its new approach to clinical laboratory rate-setting – an approach that could affect more than 1000 lab codes.  The differences in rates are so great in some instances that the realignment will take several years because federal law prohibits Medicare from reducing laboratory rates more than 15 percent in one year.

Learn more about CMS’s plans for Medicare clinical laboratory payments from this CMS news release and an accompanying CMS fact sheet; CMS’s preliminary 2027 Clinical Laboratory Fee Schedule rates and supporting data; and the Becker’s Hospital Review article  “CMS eyes Medicare pay cuts for 1,100+ lab codes: 8 things to know.”