Description

Three Years of Medicare Lab Cuts Begin January 1: What Physician Office Labs Must Do About PAMA and the 2027 CLFS

If your practice runs an in-office laboratory, Medicare is about to pay less for many of the tests you run every day, and the cuts can continue for three years.

Under PAMA, Medicare pays for most laboratory tests based on what private insurers paid, as reported by laboratories earlier this year. CMS's preliminary CY 2027 figures show the routine categories hit hardest: chemistry is down 16 percent, and microbiology and immunology are each down 19.3 percent. The law caps the reduction at 15 percent per test per year, but that cap applies in each of 2027, 2028 and 2029, so a test whose private payor median sits well below its current Medicare rate can be cut in every one of those years. The American Clinical Laboratory Association estimates that 775 tests will take the full 15 percent cut in 2027 alone.

The payment cuts are only half of the problem. More than 3,200 physician office laboratories reported data in this cycle, up from about 1,100 in the first round, and CMS issued a dedicated physician office laboratory guide this year. Many practices are still unsure whether they were required to report, whether their NPI and billing structure changed the answer, and what documentation they should hold if CMS ever asks. Failing to report when required carries civil monetary penalties of up to $10,000 per day, adjusted for inflation.

Congress may still act. The RESULTS Act would limit reductions to 5 percent a year, but it has not passed, and planning for January cannot wait on it.

Raj Sharma, CPC, CPB, will take you through the preliminary rates, the phase-in arithmetic and the applicable laboratory rules in plain operational language, and show you how to measure your own practice's exposure, confirm your compliance position and decide what to do before the final rates post in November.

Areas Covered in the Session:-

• PAMA and the CLFS in plain terms: how private payor rates became Medicare rates.
• What CMS published on September 21, 2026.
  • Average potential change of about 16 percent lower across codes with reported data.
  • 1,171 codes lower, 169 unchanged and 186 higher than CY 2026.
  • Reporting physician office laboratories up from 1,106 in 2017 to 3,262 in 2026.
• Category impact: chemistry, microbiology, immunology and molecular pathology.
• The 15 percent annual cap for 2027 through 2029, and why cuts can repeat each year.
• Worked examples: how payment for a routine in-office test could change from 2026 to 2029.
• Applicable laboratory status for physician office laboratories.
  • CLIA certification and billing Medicare Part B under the laboratory's own NPI.
  • The majority of Medicare revenues threshold.
  • The $12,500 low expenditure threshold.
  • Shared NPI and separate NPI arrangements, and WHERE practices get them wrong.
• Documentation to hold for your applicability determination.
• Civil monetary penalty exposure: up to $10,000 per day, adjusted for inflation.
• Tests with no private payor data: crosswalking, gapfilling and the September advisory panel.
• From preliminary to final rates: the comment process and November publication.
• PAMA reform: what the RESULTS Act would change, and what it would not.
• January readiness: test menu review, payer mix, send-out decisions and budget modelling.
• A 2027 to 2029 lab payment impact worksheet you can apply to your own test menu.
• Live Q&A Session.

Background:-

On September 21, 2026, CMS posted the preliminary CY 2027 Medicare Clinical Laboratory Fee Schedule rates, the first new PAMA-based rates since 2018. Across the codes with reported private payor data, rates average about 16 percent lower than CY 2026, and 1,171 codes came in lower. Final rates are expected in November and take effect on January 1, 2027.

This session is scheduled at exactly that point. The preliminary numbers are public, the comment window is closing and the final rates are only weeks away. That gives your practice time to measure its exposure and prepare, instead of finding out from the first January remittances.

Why Should You Attend:-

• Understand how PAMA ties Medicare laboratory payment to private payor rates.
• Interpret CMS's preliminary CY 2027 CLFS rates and the data behind them.
• Identify which in-office test categories face the steepest reductions.
• Calculate how the 15 percent annual cap plays out across 2027, 2028 and 2029.
• Estimate the 2027 to 2029 revenue impact on your own test menu.
• Apply the four-part applicable laboratory test to your practice.
• Recognize how NPI and billing structure change your reporting obligation.
• Know what documentation to keep, whether or not you were required to report.
• Understand the penalty exposure for failing to report when required.
• Know how CMS prices tests that received no private payor data.
• Assess what pending PAMA reform legislation would and would not change.
• Build a January action plan for your in-office laboratory.

Who Should Attend:-

• Practice and clinic owners
• Physicians and physician group leadership
• Practice managers and practice administrators
• Physician office laboratory managers and supervisors
• Laboratory directors and CLIA laboratory staff
• Medical billers and billing managers
• Medical coders and coding managers
• Revenue cycle managers and directors
• Compliance officers and compliance staff
• CFOs, finance directors and reimbursement analysts
• Payer contracting staff
• Auditors and internal audit teams
• Medical billing companies
• Nurse practitioners and physician assistants
• Urgent care and multispecialty group operators
• Healthcare consultants
• Healthcare attorneys
• Executives and administrators.