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

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

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 weighted median compared to the CY 2026 CLFS rate.
• 1,171 codes have a lower weighted median compared to the CY 2026 CLFS rate. Note: Two HCPCS codes that have a weighted median from private payor data do not have a comparable CY 2026 CLFS rate.

Results by Test Category

Growth in Data Reporting Participation Since 2017

The mix of reporting applicable laboratory types has shifted substantially since the first PAMA data reporting cycle, with total reporting laboratories increasing 230 percent overall. Specifically, while hospital labs made up only 1.1% of reporting applicable labs in 2017, in the 2026 reporting period, hospital labs account for approximately 13.6% of reporting applicable labs.

Phase-In of Payment Reductions

CLFS payment rate reductions will not take effect all at once. The Consolidated Appropriations Act, 2026 amended section 1834A of the Act to provide for a phase-in from calendar years 2027 through 2029; payment for a test may not be reduced by more than 15% per year compared with the amount established for that test in the preceding year.

Tests With No Applicable Information

For existing clinical diagnostic laboratory tests for which CMS received no applicable information, CMS held a public meeting September 15-16, 2026,¹ to gather public input on the appropriate payment methodology-crosswalking or gapfilling-for these tests. As required under section 1834(f), an expert panel of laboratory professionals provided recommendations on how rates for these tests should be set.²

Additional CLFS Materials Published Concurrently

Alongside the preliminary CY 2027 weighted median private payor rates, CMS is also publishing:

• Preliminary crosswalk and gapfill determinations for new 2026 clinical diagnostic laboratory tests.
• Final Medicare Administrative Contractor (MAC) recommendations for gapfill rates for laboratory tests new in 2025.

To view the preliminary CY 2027 Clinical Laboratory Fee Schedule rates and data, visit https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs .

2019 Regulatory Changes to "Applicable Laboratory"

In the CY 2019 Physician Fee Schedule final rule (83 FR 59667-59681), CMS made three revisions effective January 1, 2019:

• Medicare Advantage plan revenues are excluded from total Medicare revenues in the denominator of the majority-of-Medicare-revenues threshold.
• Hospitals billing for nonpatient laboratory services use Medicare revenues from Form CMS-1450 14x Type of Bill to determine whether their hospital outreach laboratories meet the majority-of-Medicare-revenues and low-expenditure thresholds.
• CMS also allowed reporting entities to condense certain applicable information at the TIN level, rather than reporting separately for each applicable laboratory at the NPI level.

We believe these regulatory revisions provided for more hospital reporting in 2026.

How to Submit Comments

In accordance with confidentiality requirements in section 1834A(a)(10) of the Social Security Act and 42 C.F.R. 414.504(f), CMS is releasing raw data for HCPCS codes reported by 10 or more reporting entities to support public review.

The public has 30 days after publication to review and submit comments on the preliminary CY 2027 CLFS rates and supporting data files. Written comments should be submitted electronically to CMS' CLFS dedicated email box at [email protected] .

CMS will publish final CY 2027 CLFS rates on the CMS website in November 2026.

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