CMS Proposes 16% Cut to 2027 Clinical Lab Rates

The Centers for Medicare and Medicaid Services released preliminary payment rates for the Calendar Year 2027 Clinical Laboratory Fee Schedule, proposing an average decrease of approximately 16% compared to 2026 rates. This marks the first repricing since 2018 under the Protecting Access to Medicare Act, with the most significant cuts concentrated in esoteric testing.

Major diagnostic providers face substantial financial risks from the proposal. Laboratory Corporation of America Holdings projects a headwind of approximately $100 million to both its top and bottom line in the first year of implementation. Quest Diagnostics Inc. also faces significant financial headwinds, though its earnings targets already account for some PAMA-related cuts.

Financial analysts at Mizuho suggest that bi-partisan support in Congress could lead to another delay of these cuts for 2027 while lawmakers seek a legislative fix. The agency expects to release final rates in November.