2027 Clinical Laboratory Fee Schedule: What preliminary rates could mean for hospitals

Hospitals could see lower Medicare payments for many separately payable clinical laboratory services beginning in 2027.

The Centers for Medicare & Medicaid Services (CMS) recently released preliminary calendar year (CY) 2027 payment rates under the Medicare Clinical Laboratory Fee Schedule (CLFS). The rates reflect private payer data during the 2026 reporting period and represent the second full data collection and reporting cycle for most tests under the Protecting Access to Medicare Act of 2014 (PAMA).

What changes under the preliminary CY 2027 CLFS rates?

The preliminary CY 2027 rate update uses median fee schedule amounts based on private payer data during the 2026 reporting period, replacing the 2017-based medians. Payment reductions will be phased in and capped at a cumulative 15% per year for CY 2027 through CY 2029, followed by full implementation. For hospital laboratory services, these reductions apply only to services paid separately and do not affect services that are part of a bundled payment, including packaged ambulatory payment classification (APC) payments.

What could the preliminary rates mean for hospitals?

To assess the potential financial implications, DataGen analyzed outpatient laboratory service volumes at acute care hospitals using CY 2025 Medicare claims and CMS’ preliminary CY 2027 payment rates. The analysis focuses on separately payable laboratory services and excludes packaged services and services for which hospitals are not paid. For 2027 alone, DataGen estimates hospitals will see a $165 million reduction in fee-for-service payments, with an estimated 10-year reduction of $2.2 billion.

It’s important for hospitals and health systems to understand which laboratory services may be affected and how changes in CLFS rates could influence Medicare reimbursement.

Why hospitals should be paying attention now

The CY 2027 rates remain preliminary, meaning stakeholders still have an opportunity to assess where Medicare laboratory reimbursement could change, understand the potential financial implications for their organizations and weigh in before the rates are finalized.

CMS established a 30-day public comment period following publication of the preliminary rates and plans to publish final CY 2027 CLFS rates in November 2026.

The 30-day comment period ends on Oct. 20. You can submit your comments to CMS’ CLFS dedicated email box.