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