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After years of delays, the Centers for Medicare & Medicaid Services (CMS) is preparing to update the Clinical Laboratory Fee Schedule's (CLFS) reimbursement rates for clinical diagnostic laboratory tests (CDLTs) that aren't advanced diagnostic laboratory tests (ADLTs). This update, calculated based on laboratory-submitted private payor reimbursement rates, marks the first time since 2017 that rates for these key clinical services have been adjusted.
Marring this long-awaited update is that absent a legislative fix starting February 1, 2026, laboratories that bill Medicare above a minimum threshold, including hospital outreach laboratories that bill Medicare Part B on Form CMS-150 under TOB 14x, will be required to submit to CMS their private payor reimbursement and other data from 2019. Health systems, hospitals, and laboratories should be preparing for these looming reporting requirements, as well as monitoring the cautiously optimistic possibility that governmental intervention, such as the Reforming and Enhancing Sustainable Updates to Laboratory Testing Services (RESULTS) Act or the recently released government funding package, may fix this reporting period discordance and ensure that the reported data better matches the current clinical laboratory market.
PAMA Directed CMS to Use Laboratory-Submitted Private Payor Data to Calculate CLFS
The Protecting Access to Medicare Act (PAMA) of 2014 reformed how CMS calculated laboratory service reimbursement rates under the CLFS by requiring "applicable laboratories" to collect and report to CMS private payor reimbursement rates and other data for all non-ADLT scheduled clinical laboratory tests every three years. (PAMA also established a separate framework for ADLTs, noting that applicable laboratories performing ADLTs are initially paid at list price and thereafter must report applicable information annually.) Although this payment data was to result in changes to the then-current reimbursement rates, PAMA capped reimbursement reductions for any applicable test by a set percentage—first 10%, then up to 15%—of the previous year's median reported rate.
Industry uncertainty as to the definition of "applicable laboratories" and nominal response rates resulted in CMS significantly underestimating market rates and reducing reimbursements in the 2017 CLFS for a majority of tests by billions in the first three-year rate cycle, as outlined in an October 2025 American Clinical Laboratory Association Letter to Congress. Seven subsequent regulatory and congressional actions have delayed the second reporting period, resulting in these artificially low rates enduring for almost a decade.
These ongoing delays appear to be at an end, and as of right now, applicable laboratories have from February 1, 2026, to April 30, 2026, to report private payor rates for each test and other data to CMS in order to establish the 2027 CLFS. However, and alarmingly, these repeated delays have not changed the period this second cycle covers; rather, applicable laboratories will be required to report private payor rates received and other data collected from January 1, 2019, to June 30, 2019. An "applicable laboratory" that must report is a laboratory defined under CLIA that bills Medicare Part B either under its own NPI or on Form CMS-1450 (e.g., a hospital outreach laboratory) and meets other threshold requirements. A laboratory's failure to report the required information can result in a civil money penalty of up to $10,000 per day for each test the laboratory fails to report.
The RESULTS Act Could Fix the PAMA Data Problem
To mitigate some of the significant administrative burden resulting from locating and reporting reimbursement figures from early 2019, the RESULTS Act, H.R. 5269 and S. 2761, was introduced in 2025 and is currently in committee with telegraphed bipartisan support.
The RESULTS Act seeks to revise the reporting framework by establishing a new data collection period covering the first half of 2027, a new reporting period covering the first quarter of 2028, and creating a more nuanced approach to reporting on a four-year cycle. The RESULTS Act would also clarify which entities constitute an "applicable laboratory," including how certain minimum threshold amounts are calculated; and, limit what information an applicable laboratory needs to report to only private payor rate data for "non-widely available tests," or codes for which 100 or fewer laboratories bill and are paid under the CLFS, and ADLTs "owned" by the laboratory. For all other "widely available" tests, the RESULTS Act would require CMS to secure claims data from independent claims data entities.
The RESULTS Act would also freeze the CLFS rates at 2025 levels for 2026 through 2028. Beginning in 2029, CMS would calculate weighted medians for CLFS test codes, capping any annual reduction to 5%, rather than the 15% allowed currently. The RESULTS Act would not change the payment methodology for new ADLTs and new tests that are not ADLTs.
Finally, the RESULTS Act would allow for administrative and judicial review of any of the established rates after January 1, 2029. PAMA does not allow for any such judicial or administrative review.
Stop Gap Proposed in the Government Funding Legislation
On January 20, 2026, the House Appropriations Committee released the text of bipartisan funding package that includes funding for the Department of Health and Human Services before the January 30, 2026, government funding deadline. As government funding runs out on January 30, 2026, lawmakers are moving with some urgency to ensure continued funding and pass at least some version of this package, with a vote forecasted this week. The bill includes provisions that would shift the PAMA data collection period to May 1 through July 31, 2026, and collect data based on payments received from January 1 through June 30, 2025. While this proposal would merely delay the reporting period by a few months, it would resolve the matter of having to report 2019 data this year–data that a lot of laboratories may not have readily accessible. The bill would also delay the scheduled PAMA rate reductions (up to 15%) to various CLFS tests through December 31, 2026, and allow CMS to implement policy change through program memoranda rather than rule making. Keep in mind that the funding bill is in flux, so whether these provisions make it into the final bill is anyone's guess. Nonetheless, the fact that a rate reporting period fix is included certainly provides reason to be hopeful.
What Happens Next?
While the RESULTS Act is relatively early in its legislative journey, bipartisan support and industry advocacy allow for cautious optimism that the pending PAMA deadlines and requirements to submit antiquated data that no longer reflect the current market may be addressed, either through independent legislative action or as part of ongoing budget and funding legislation.
On January 8, 2026, the House Energy and Commerce Committee Health Subcommittee held a hearing on the RESULTS Act. The discussion at the hearing demonstrated clear bipartisan support for the bill's passage, including pointed questions as to the consequence on clinical laboratories if Congress fails to act.
The government funding package is likely to move quickly through Congress over the next 10 days so laboratories soon should know whether the provisions addressing PAMA reporting will survive the imminent legislative negotiations. If successful, the funding bill's changes may alleviate some of the legislative pressure to quickly pass the RESULTS Act but hopefully will not completely undermine the RESULTS Act's current momentum.
Absent passing of the RESULTS Act, or another regulatory or congressional action through the funding bill or otherwise, many laboratories, including hospital outreach laboratories, will be required to submit to CMS private payor reimbursement data and other information from January 1, 2019, to June 30, 2019, starting February 1, 2026. As a result, all laboratories should be monitoring developments on this topic and evaluating their ability to gather and report the required 2019 data before the deadline of April 30, 2026. Importantly, laboratories should not wait until the last minute to report the required data because, at least in 2016, the process was more involved than simply hitting a submit button. Absent congressional action changing the timelines, laboratories (including hospital outreach laboratories) should stay tuned for CMS instruction on this process in the coming weeks.
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