The clock is ticking on imminent reporting requirements and the urgent need for lasting Medicare rate stability.
Clinical laboratories received welcome news when Congress passed legislation delaying PAMA‑driven Medicare Clinical Laboratory Fee Schedule (CLFS) cuts through 2026, and data that will be used for setting rates in 2027 will be based on 2025 data instead of 2019 data. Labs must now be prepared to report on 2025 in the coming months. In our recent webinar, American Clinical Lab Association (ACLA) President Susan Van Meter and ACLA General Counsel Joyce Gresko walked through what these changes mean for compliance obligations, operational planning, and the broader future of Medicare rate‑setting for clinical laboratories.
Where PAMA Stands After the Update
PAMA was designed to tie Medicare CLFS rates to the volume weighted median of private payer rates. However, since the only completed reporting period used 2016 data submitted in 2017—representing fewer than 1% of U.S. laboratories—Medicare rates continue to rely on outdated, unrepresentative data. As a result, laboratories faced nearly $4 billion in cumulative cuts, with deeper reductions looming once phased in caps expire in 2030.
The 2026 appropriations bill paused further cuts until January 2027, when reductions could resume at up to 15% per year through 2029. To prepare for future rate setting, the law also shifted upcoming data collection and reporting timelines.
What Labs Need to Do: 2025 Data Collection & 2026 Reporting
“Applicable Laboratories” are required to report. An applicable laboratory is defined as any organization that meets all of the following criteria during the data collection period:
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It operates as a laboratory under CLIA.
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It bills Medicare Part B for laboratory services:
• The lab submits claims under its own NPI, or
• For hospital outreach labs, claims are billed using Type of Bill 14x. -
Most of its Medicare revenue comes from the CLFS or the Physician Fee Schedule. Revenue from Medicare Parts A, B, and D is evaluated together (Part C is excluded).
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It receives more than $12,500 in CLFS payments during the six month collection period.
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Private payers include commercial insurance plans, Medicare Advantage organizations, Medicaid Managed Care plans, and group health plans. Laboratories are required to report the private payer rate paid for each test—meaning the allowed amount that combines payment from the insurer and any patient cost sharing—regardless of whether the lab was in network or out of network.
Reporting window: May 1–July 31, 2026, submitted through the CMS Enterprise Portal with separate Submitter and Certifier roles. ADLT reporting cycles remained unchanged.
Why Long-Term Reform Is Still Necessary
Although the delay provides temporary relief, it also introduces new reporting requirements—and renewed urgency for long term reform. The RESULTS Act offers a sustainable fix by:
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Using a secure, independent claims database to deliver representative market data
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Reducing reporting burden for widely available tests
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Freeze CLFS rates at 2026 levels until 2029
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Adding a 5% annual cap on reductions when new data is implemented
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Extending rate setting updates to a four year cycle
These changes would support predictability, innovation, and patient access. You can take action at Stoplabcuts.org and tell Congress to stop Medicare cuts to clinical laboratory testing.
Key Takeaways
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No PAMA cuts in 2026; next possible cuts start Jan 2027 (up to 15% for 3 years).
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You must report if you meet the Applicable Laboratory definition—May 1–July 31, 2026—for final payments received Jan–Jun 2025.
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Report the private payer rate (payer + patient cost share), by HCPCS, rate, volume, and NPI.
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Medicare Advantage and Medicaid MCO payments are included in private payer data (under current law).
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ADLTs reporting: unchanged.
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The RESULTS Act would fix core flaws: better data, less burden, and 5% cut cap when new data are implemented—advocacy matters.
Conclusion
Short term PAMA relief provided laboratories with much needed breathing room—but it also created a clear task list. The 2026 reporting cycle is approaching quickly, and the organizations that begin preparing now will be best positioned to ensure compliance, protect reimbursement, and minimize operational disruption. At the same time, the long term stability of the Clinical Laboratory Fee Schedule depends on continued momentum behind the RESULTS Act, which remains essential for fixing PAMA’s core structural challenges and safeguarding the future of diagnostic innovation. By staying proactive today, laboratories can help shape a more predictable, sustainable future for Medicare rate setting.
Ready to dive deeper?
👉Watch the on‑demand webinar
At Quadax, we understand the complexity and urgency of navigating PAMA reform. Our revenue cycle experts help organizations interpret regulatory shifts, strengthen reimbursement strategies, and ensure ongoing compliance. From data reporting readiness to revenue impact modeling, we provide the tools, insights, and support labs need to protect their bottom line and plan confidently for the future.
Resources:
Main CLFS reporting page: https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule/clfs-reporting
CLFS Data Collection System User Guide (rev. 2021): https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/CLFS-Data-Collection-System-User-Guide.pdf
PAMA FAQs and educational resources: https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule/clfs-pama-educational-resources
