Medicare's 15% Lab Test Cut Is Delayed to 2027, Not Canceled

Congress delayed Medicare's scheduled 15% cut to about 800 clinical laboratory tests through December 31, 2026, under the Consolidated Appropriations Act, 2026, signed February 3, 2026, according to the Centers for Medicare & Medicaid Services. The cut is not gone. It returns January 1, 2027, capped at up to 15% per test per year through December 31, 2029, using a data-reporting cycle that already closed once this year and will run again before the new rates take effect.

What Congress Changed for 2026

The American Clinical Laboratory Association called the blocked reduction a fourth round of cuts under the Protecting Access to Medicare Act (PAMA), a law Congress passed in 2014 to tie Medicare's Clinical Laboratory Fee Schedule (CLFS) to private-payer rates. Since then, ACLA reports, Congress has intervened on a bipartisan basis seven times to delay CLFS reporting periods and six times to delay the payment cuts tied to that data. The 2026 relief bill also swapped in fresher data: instead of setting 2027 rates from laboratory data collected back in 2019, CMS will use data collected between January 1 and June 30, 2025, according to the CMS CLFS reporting page.

The Reporting Calendar Practices With a Lab Need to Track

The same legislation moved the reporting window itself. It had been scheduled for January 1 through March 31, 2026; the Consolidated Appropriations Act pushed it to May 1 through July 31, 2026, a window that has already closed, per an analysis from law firm McDonald Hopkins. A laboratory counts as "applicable" and must report if it billed at least $12,500 in Medicare CLFS revenue during that six-month data period, or if it is a hospital outreach lab billing non-patient specimen services under bill type 14X, according to guidance summarized by the Michigan Health & Hospital Association. CMS can fine a lab up to $10,000 a day, adjusted for inflation, for each day it fails to report data or for each item of false or misleading information it submits. New CLFS payment rates built from this reporting cycle take effect January 1, 2027.

Why the Delay Still Matters for Practices With In-House Labs

Physician office laboratories make up 52.9% of all CLIA-certified labs in the country, according to CMS data cited by the CDC, so a Medicare rate reset lands directly on a large share of independent practices, not just reference labs and hospital systems. The stakes are not new. PAMA's first data-collection round pulled figures from fewer than 1% of the nation's laboratories, and ACLA says that skewed sample cut Medicare payment on 75% of CLFS-listed tests by $3.8 billion over the program's first three years of actual cuts, 2018 through 2020, far above the $2.5 billion in total reductions the Congressional Budget Office had projected over a full decade when PAMA passed. Common tests billed daily in a practice setting, including complete blood counts, basic metabolic panels, and lipid panels, have absorbed cumulative Medicare cuts of 30% or more since 2018, according to ADSC's 2026 mid-year lab reimbursement review. A practice running its own CLIA-waived panel is pricing 2027 against a payment floor that has already dropped by roughly a third since the law took effect, even before the next scheduled reduction lands.

The Reform Bill Waiting Behind the Delay

A longer-term fix is stalled in Congress. The RESULTS Act, introduced with bipartisan sponsors in September 2025, would cap future annual CLFS reductions at 5% instead of the current 15%, according to ACLA's summary of the bill. It would also replace lab self-reported pricing data with figures CMS pulls directly from independent commercial payer databases, exclude Medicaid managed care rates from the calculation, and freeze payment rates during a phase-in period running through 2029. ACLA has urged lawmakers to advance the bill in 2026 rather than let the current moratorium simply expire into another round of last-minute delay legislation. As of this scan, the bill has not passed either chamber.

How the Cut Caps Have Moved Since 2018

The percentage cap on how much Medicare can cut any single test's price in one year has shifted several times since PAMA took effect, and each shift changes how fast a practice's lab reimbursement can erode in a bad year.

Source: American Clinical Laboratory Association, Applied Policy, and CMS CLFS program materials, compiled above.

What This Means for a Practice's 2027 Budget

A practice manager building a 2027 budget now has a firmer set of dates than a practice manager had a year ago, since the reporting window that sets those rates already closed on July 31, 2026, and CMS has committed to a January 1, 2027 effective date rather than an open-ended threat. That timing gives billing teams roughly three and a half months between now and year-end to model the exposure: run current CPT and HCPCS lab codes against the 15% maximum reduction, flag which tests sit closest to the CLIA-waived, high-volume category CMS has targeted before, and decide whether in-house testing volume still clears overhead once the 2027 rate lands. Practices that outsource to a reference lab are not exempt either, since a reference lab absorbing the same cut typically passes some of it back through renegotiated service contracts. The moratorium bought twelve months, not a permanent fix, and the next reporting cycle is already the one that will set the number a practice sees on January 1, 2027.

Sources

• CMS, "Clinical Laboratory Fee Schedule (CLFS)"
• American Clinical Laboratory Association, "ACLA Welcomes PAMA Relief in Funding Package, Urges Congress to Advance RESULTS Act in 2026"
• McDonald Hopkins, "Congress enacts PAMA relief: Legal and compliance implications for laboratories, physician groups, and health care providers"
• Michigan Health & Hospital Association, "Clinical Laboratory Fee Schedule Data Reporting Period Opens May 1"
• Advis, "CMS PAMA Reporting 2026: CLFS Data Deadline & Requirements"
• ADSC, "The 2026 Mid-Year Lab Reimbursement Review: PAMA Reporting Is Closing. Here's What Comes Next"
• Applied Policy, "PAMA: Is Your Lab Ready for Cuts of Up to 15 Percent on January 1?"
• CDC, "Waived Tests"