Clinical laboratories face renewed Medicare payment uncertainty as a congressional funding impasse threatens to derail temporary PAMA relief, with new CLFS cuts scheduled to take effect in days unless lawmakers act.
Clinical laboratories are once again facing near-term Medicare payment uncertainty as congressional negotiations over a must-pass spending package stall, putting temporary relief from PAMA-driven cuts at risk just days before new reductions are scheduled to take effect.
Dark Daily last reported on this in November.
The American Clinical Laboratory Association (ACLA) is closely tracking bipartisan, bicameral negotiations tied to a broader government funding deal that includes provisions to delay further cuts to the Medicare Clinical Laboratory Fee Schedule (CLFS). The proposal would push back additional PAMA-related reductions until Jan. 1, 2027, and update the private payor data CMS uses to set future Medicare rates. Without action, lab test reimbursement rate cuts are scheduled to go into effect on Jan. 31.
ACLA Backs PAMA Relief but Warns Structural Flaws and Imminent CLFS Cuts Remain
ACLA President Susan Van Meter said lawmakers appear increasingly aware of the structural flaws baked into PAMA’s rate-setting framework.
“ACLA appreciates that lawmakers on both sides of the aisle recognize the serious and ongoing problems posed by PAMA,” Van Meter said in a statement provided by the organization. (Photo credit: ACLA)
She emphasized that shifting the data collection period to more recent market information would represent a meaningful, though incomplete, step forward.
Under the legislative language outlined in the bill, Congress would revise the PAMA phase-in schedule by extending payment reduction caps through 2029, rather than allowing steeper cuts to resume sooner. The bill would also replace the 2019 private payor data CMS is currently set to rely on with data from 2025, addressing longstanding concerns from laboratories that Medicare rates are being calculated using outdated and unrepresentative commercial payment information.
“Updating the data collection period from 2019 to 2025 would move Medicare payment rates away from reliance on seven-year-old market data that would otherwise be used to set 2027 rates,” Van Meter said, according to the statement from ACLA. However, she cautioned that even with updated timelines, “CMS is unlikely to receive comprehensive and representative commercial data needed to set accurate Medicare rates.”
The stakes for laboratories are immediate. Without congressional action, new CLFS cuts of up to 15 percent on roughly 800 tests are scheduled to take effect on Jan. 31, adding to what ACLA described as “three previous rounds of reductions.” Lab professionals have repeatedly warned that cumulative cuts threaten the sustainability of community-based testing and could restrict patient access, particularly in rural and underserved areas.
PAMA Relief Tied to High-Stakes Funding Fight, Leaving Labs in Legislative Limbo
The PAMA provisions are embedded in a larger government funding package that now faces political headwinds. As reported in The Washington Post, Senate Democrats have indicated they will block the broader spending deal unless it is restructured, raising the possibility of a partial government shutdown. While the dispute centers on Department of Homeland Security (DHS) funding, failure to advance the package would also stall health-related provisions, including laboratory payment relief. There has been discussion about separating votes for DHS and Health and Human Services (HHS) spending, but it is not clear yet whether that will happen. The PAMA delays are tied into the HHS spending package.
That linkage is raising concern across the laboratory sector, where advocates argue that PAMA relief has long enjoyed bipartisan support and should not become collateral damage. Van Meter urged lawmakers to move quickly, calling the proposal “a down payment toward lasting PAMA reform” and pressing Congress to advance the bipartisan RESULTS Act this year.
For lab professionals, the outcome of the funding negotiations will determine whether temporary relief materializes—or whether another round of PAMA cuts proceeds as scheduled, further reshaping the Medicare testing landscape just as laboratories continue to adapt to tightening margins and rising operational costs.
—Janette Wider
