Medicare Proposes an Average 16 Percent Cut to 2027 Lab Rates. The Comment Window Closes About Oct. 21.
CMS's preliminary 2027 Clinical Laboratory Fee Schedule rates are about 16 percent lower on average, with cuts capped at 15 percent per test per year through 2029. Practices with in-office labs have days left to comment.
If your practice runs an in-office lab or sends specimens out, the Medicare rate behind those tests is about to move. The Centers for Medicare and Medicaid Services (CMS) published preliminary 2027 Clinical Laboratory Fee Schedule (CLFS) rates on Sept. 21 and gave the public 30 days to review and comment, which puts the deadline at about Oct. 21. CMS has not posted a specific date.
CMS's fact sheet puts the average potential change from 2026 rates at about 16 percent lower. The agency says in its press release that Medicare has been paying about 16 percent more for laboratory services than private payers and that the change would save an estimated $1 billion a year.
What the numbers show
The rates come from private payer data collected Jan. 1 through June 30, 2025, and reported to CMS from May 1 to July 31, 2026. Of 1,528 codes with a new private payer weighted median, 1,171 are lower, 186 are higher and 169 are unchanged. By category, the potential changes are -16 percent for chemistry (387 codes), -19.3 percent for both microbiology (224 codes) and immunology (205 codes), -22 percent for molecular pathology (211 codes) and -23 percent for genomic sequencing (42 codes). Proprietary laboratory analyses (151 codes) change by -2.4 percent.
The phase-in
A test's payment may not fall by more than 15 percent from one year to the next, so the larger reductions are phased in from 2027 through 2029. The Consolidated Appropriations Act, 2026 revised the reporting period and set that phase-in, CMS says. CMS Administrator Dr. Mehmet Oz said in the release that "taxpayers and Medicare patients have been paying excessive rates to labs for years."
Not everyone accepts the data. The American Hospital Association said it is concerned that the preliminary rates "would impose steep cuts of up to 15%" on almost 1,200 tests "based on incomplete commercial market data."
Large cuts phased over three years are still cuts. Check the codes you actually bill before assuming the average applies to you.
Where physician offices fit
Physician office laboratories were the largest group of labs reporting private payer data, about half of the 6,411 that reported in 2026, according to the fact sheet. Their number rose from 1,106 in 2017 to 3,262 in 2026. The fact sheet does not break out rate effects by lab type, so the category figures are the best available guide. CMS plans to publish final 2027 rates in November.
What practices should do now
Pull your highest-volume lab codes, compare them with the preliminary rates in the CMS data files, and estimate the 2027 effect after the 15 percent cap. If a rate looks wrong, comments go to CLFS_Annual_Public_Meeting@cms.hhs.gov. CMS is also asking whether its approach of publishing rates with and without its exclusions for duplicate and outlier records is appropriate. Labs face other rule changes too; see our report on proposed CLIA changes that would allow remote lab review.
Reported, fact-checked and edited by The Script Pad's editorial staff.
This article is for professional education and does not replace clinical judgment. Treatment decisions should be based on the individual patient and current guidelines.
