CMS Announces New Preliminary Medicare Payment Rates for Laboratory Services

To stop payments above market rates for laboratory services in Medicare and save taxpayer dollars, the Centers for Medicare & Medicaid Services (CMS) plans to better align the 2027 clinical laboratory fee schedule rates with private sector payment rates, saving an estimated $1 billion annually. While final rates won’t be released until later this year, CMS is releasing the data and information used to determine the preliminary 2027 Medicare payment rates for laboratory services showing that Medicare has been paying about 16% more for laboratory services than private payors. Basing Medicare’s rates on those paid by the private sector helps ensure that Medicare is paying appropriate amounts for laboratory tests and protecting taxpayer dollars.

“Taxpayers and Medicare patients have been paying excessive rates to labs for years, but with some help from Congress, CMS is working to ensure that Medicare isn’t paying more than private insurers for the exact same tests,” said CMS Administrator Dr. Mehmet Oz. “By releasing this preliminary information, we are providing greater transparency into the actual market rates for laboratory services, rooting out waste, and supporting better-informed pricing decisions across the healthcare system, including Medicaid and Affordable Care Act Exchanges.”

The preliminary 2027 payment rates for most laboratory services under the Medicare Clinical Laboratory Fee Schedule are based off information collected from laboratories. Congress created a process in 2014 requiring CMS to periodically update the payment rates for most laboratory services based on what private payors actually pay for those same services. However, due to legislative delays, that process has been used only once for these tests. Meanwhile, the rates the private sector pays have decreased significantly for most laboratory tests. The Consolidated Appropriations Act, 2026, cleared the way for the agency to collect updated private payor data every three years for these tests.

With the preliminary 2027 rates, most Medicare laboratory test payments will be aligned with these private sector rates. By law, Medicare payment for a clinical diagnostic laboratory test cannot be reduced by more than 15% per year through 2029. CMS will gradually phase in the reductions through 2029.

The public has 30 days from today to review and submit comments on the preliminary Calendar Year (CY) 2027 Clinical Laboratory Fee Schedule rates and supporting data. For laboratory tests that didn’t get any private-payor data reported to CMS, CMS held a public meeting September 15 and 16 to decide how to price them. These determinations will be published in early October along with a 30-day comment period.

CMS anticipates finalizing the CY 2027 payment rates for clinical diagnostic laboratory tests under the Clinical Laboratory Fee Schedule in November 2026. The final payment rates will go into effect beginning January 1, 2027.