Congress included lab relief in its latest funding bill, signaling growing awareness of PAMA’s impact. Here’s what lab leaders should do next.
During a Nov. 12 webinar hosted by Dark Daily, the discussion centered on why a small laboratory provision ended up in the massive continuing resolution (CR) to reopen the federal government, and what it signals about congressional awareness of the urgent issues surrounding PAMA.
Panelists Susan Van Meter, president, American Clinical Laboratory Association (ACLA) and Jay Weiss, PhD, president and co-owner, Allermetrix explained that the inclusion reflects years of coordinated, persistent advocacy by ACLA, NILA, laboratorians, and industry partners, who have made the case that impending cuts on January 1 would be devastating. Although Congress has repeatedly delayed PAMA cuts and reporting requirements—five and six times respectively—stakeholders emphasized that this should never be taken for granted.
Both speakers highlighted that many lawmakers were initially unaware that laboratories were facing up to 15% reductions on roughly 800 codes beginning in 2026, with ripple effects extending to private insurers because their rates are indexed to Medicare. As Congress searched for a bipartisan path to reopen the government, advocates successfully argued that a short-term delay of the PAMA “cliff” needed to be included in the CR. That delay now runs only until January 30.
“We have been working very deliberately around the clock since the beginning of this year to encourage Congress to move forward legislation that would reform PAMA and address the reductions. It’s been a complicated legislative year,” said Susan Van Meter, president, ACLA. (Photo credit: ACLA)
RESULTS Act
The panel then outlined the RESULTS Act, a bipartisan proposal intended to fix structural flaws in PAMA. Its main provisions include:
Replacing lab-reported commercial rates with data from a nonprofit claims database for widely available tests
Requiring labs to report only for low-volume codes (100 or fewer labs)
Reducing reporting burden significantly
Eliminating three years of up to 15% cuts
Capping future reductions at 5% annually
Ensuring Medicare rates are based on actual, adjudicated claims instead of outdated 2016 data.
Speakers noted that commercial plans already submit claims data to independent entities such as FAIR Health, so the framework is neither novel nor untested. Claims would be reported only after full adjudication, typically six months post-submission.
On timing, the panel acknowledged that passing the RESULTS Act before Jan. 30 is ambitious, especially after weeks of congressional inaction during the shutdown fight. Still, they characterized the inclusion of lab relief in the CR as a strong signal that lawmakers view PAMA reform as legitimate and urgent. A Congressional Budget Office score has not yet been issued for the RESULTS Act, though preliminary scoring requests have been made.
What Lab Leaders Can Do
Both speakers urged labs to prepare dual budgets—one assuming RESULTS Act passage, another reflecting full PAMA implementation. Contingency planning may include staff reductions, automation investments, operational cuts, and pursuing non-payer revenue streams. They also emphasized that PAMA cuts would affect far more than Medicare because commercial payers peg rates to the CLFS.
Finally, both panelists stressed that advocacy in the next few weeks is critical. They encouraged labs to contact lawmakers through email, phone, or in-person visits—and especially to invite members of Congress to tour their laboratories. The StopLabCuts.org campaign has already generated 150,000 messages to Capitol Hill; speakers urged the audience to double that volume. With strong bipartisan sponsorship in both chambers, they said the RESULTS Act has momentum—but is not guaranteed without significant grassroots pressure.
If you missed the live webinar, view it on demand, here.
This article was created with the assistance of Generative AI and has undergone editorial review before publishing.
The Senate’s government funding proposal includes a 30-day delay in PAMA cuts, giving clinical labs more time to prepare for reduced Medicare reimbursement rates.
Tucked into the Senate’s government funding proposal is a modest yet impactful measure that gives clinical laboratories a brief reprieve from PAMA reimbursement cuts.
On Nov. 10, the Senate amended and passed a version of a House funding bill, H.R. 5371, designed to reopen the government and allocate funding across multiple agencies. Among its 394 pages is a 30-day stopgap measure delaying PAMA reimbursement cuts, pushing the effective date from January 1 to January 31, 2026.
“While this 30-day reprieve provides welcome relief and demonstrates growing awareness of the impact these cuts have on laboratories and patient access, our work is far from done,” said Clarisa Blattner, senior director of revenue and payor optimization at XiFin, who was among the first to publicly note the extension via a LinkedIn post.
The Senate provision references updates to Section 1834A of the Social Security Act, known internally as Section 6209. The amendment modifies how CMS phases in payment reductions based on private payer data:
The 2026 calendar year is divided into two periods: January 1–30, 2026, and January 31–December 31, 2026, rather than treating the entire year as a single implementation period.
Reporting windows for private-sector payment data, which inform Medicare rates, are also extended. Instead of ending December 31, 2025, the next reporting period will run from February 1 through April 30, 2026.
These changes give laboratories additional time to prepare, gather, and validate private payer data while adjusting to new reimbursement rates—a key operational relief, especially for smaller and independent labs.
Extra Time to Advance the RESULTS Act
G2 Intelligence also reported that the temporary delay also offers the clinical lab industry a critical window to rally support for the RESULTS Act (Reforming and Enhancing Sustainable Updates to Laboratory Testing Services Act). The bill aims to reform PAMA by reducing reimbursement rate cuts, using an independent database for commercial payer reporting, and lengthening intervals between reporting windows.
Industry observers had warned that Congress was unlikely to again delay PAMA cuts, which have been postponed periodically since the pandemic. The 30-day extension is therefore notable, giving laboratories a short but meaningful buffer to continue advocacy and prepare for upcoming rate adjustments.
Looking Ahead
Laboratory leaders can use this window to assess financial impacts, adjust operational plans, and ensure compliance with updated reporting requirements. As CMS continues to refine its private-payer-based payment system under PAMA, this modest delay offers a critical opportunity to stabilize lab operations and maintain patient access to essential diagnostic services.
The bipartisan RESULTS Act, designed to overhaul Medicare’s payment system for clinical laboratory testing, is on hold amid the ongoing government shutdown. With cuts of up to 15% set to hit 800 common lab tests in 2026, laboratory leaders warn that the delay threatens patient access and lab stability nationwide.
Efforts to reform how Medicare pays for clinical laboratory testing have hit a standstill as the ongoing federal government shutdown freezes legislative progress on Capitol Hill, delaying long-awaited relief for labs facing steep payment cuts in 2026.
The bipartisan Reforming and Enhancing Sustainable Updates to Laboratory Testing Services (RESULTS) Act—introduced in September by Senators Raphael Warnock (D-GA) and Thom Tillis (R-NC)—was gaining momentum as a fix to long-standing problems in the Medicare Clinical Laboratory Fee Schedule (CLFS). But with Congress largely at a standstill, the bill and several other healthcare measures are now in limbo, leaving labs anxious about their financial outlook heading into next year.
At stake are payment reductions of up to 15% for more than 800 commonly ordered laboratory tests, scheduled to take effect on January 1, 2026. Laboratory organizations warn that without swift action, the cuts could destabilize the nation’s diagnostic infrastructure, threaten patient access, and further weaken community and hospital outreach laboratories already strained by workforce shortages and inflation.
Organizations Pen Letter
In a letter sent to congressional leaders on October 30, more than two dozen healthcare and laboratory organizations, including the American Clinical Laboratory Association (ACLA), the College of American Pathologists (CAP), the American Hospital Association (AHA), and the American Medical Association (AMA), urged Congress to pass the RESULTS Act to “protect patient access to clinical laboratory services.”
“Timely access to innovative clinical laboratory tests is critical to the prevention, early detection, therapy selection, and effective management of chronic and life-threatening diseases,” the coalition wrote. “Without action, around 800 laboratory tests will be subject to payment cuts of up to 15% on January 1, 2026, threatening patient access to routine and life-saving diagnostics.”
The letter highlights a decade-long problem stemming from the Protecting Access to Medicare Act (PAMA) of 2014. That law aimed to align Medicare reimbursement with private market rates but relied on limited data reporting—less than 1% of lab data nationwide—resulting in artificially low payment rates. In its first three years alone, PAMA implementation cut nearly $4 billion from the CLFS. Congress has since delayed those cuts five times, but advocates say temporary fixes are no longer sustainable.
“The time for permanent reform is now,” the coalition urged.
Shutdown Leaves Critical Medicare Lab Payment Fix Hanging in the Balance
The RESULTS Act seeks to overhaul the payment process to ensure rates reflect the full diversity of the laboratory market, including independent, hospital outreach, and physician office laboratories. It would reduce administrative burdens on both labs and the Centers for Medicare & Medicaid Services (CMS), cap annual payment reductions at 5% instead of 15%, and extend data reporting cycles to every four years. The bill would also empower CMS to work with an independent third party to collect more representative market data and make rates subject to administrative or judicial review.
Supporters say these reforms would promote innovation and stabilize Medicare reimbursement. Industry groups agree that without reform, continued cuts could push smaller community and regional labs, particularly those serving rural or underserved populations, to close their doors.
ACLA president Susan Van Meter underscored the importance of laboratories in guiding medical decisions. “Clinical laboratories deliver essential information that individuals need to better understand their own health status, while also serving as the backbone of our healthcare system, providing the results that inform 70% of medical decisions,” she said.
ACLA president Susan Van Meter noted, “As our industry continues to innovate and tailor healthcare solutions through personalized medicine, the RESULTS Act is a critical step to safeguard access to these life-saving tools, reinforce our healthcare infrastructure, and support continued innovation in laboratory medicine.” (Photo credit: ACLA)
However, with the government shutdown halting normal committee business and delaying budget negotiations, the RESULTS Act—along with various other bipartisan healthcare bills—remains stuck in legislative limbo. For laboratory leaders, that means more uncertainty and a narrowing window for action before the 2026 cuts take effect.
The coalition letter concluded, “We stand ready to help advance the RESULTS Act to achieve fundamental reform of the flawed Medicare clinical laboratory payment system.”
The federal government shutdown has suspended key scientific operations—including FDA application processing, EPA inspections, NIH and NSF grant reviews, CDC reporting, and OSHA enforcement—resulting in significant delays for laboratories.
As of October 1, 2025, a lapse in federal funding has forced many U.S. science-relevant agencies to curtail nonessential operations, leaving laboratory leaders to manage uncertainty, delays, and compliance risks.
What’s Happening Across Agencies
Lab Manager reported that the FDA warned that “new drug, biologics, and device applications that require user fees are not being accepted during the shutdown.”
In an official message, FDA Commissioner Marty Makary, MD, MPH, stated that while “many employees will be furloughed during the lapse period,” the agency will “continue to fully execute our public health mission to the extent permitted by law.”
FDA Commissioner Marty Makary, MD, MPH, noted in the FDA’s official message, “I am disappointed that Congress failed to reach a budget agreement. As a result, the FDA is now faced with a lapse in appropriations and will be forced to shut down certain operations of the agency.” (Photo credit: FDA)
The Los Angeles Times reported that EPA will see a sweeping reduction in capacity, with nearly 90 % of its workforce being furloughed.
Lab Manager also reported that new permits, inspections, and compliance enforcement are largely frozen.
HHS Contingency Plan
Under the HHS contingency plan, which covers NIH, CDC, and other health agencies:
Out of ~79,717 employees, 32,460 are estimated to be furloughed under the plan.
HHS will continue only “exempt or excepted” activities, such as outbreak monitoring by CDC and “core functions” at the FDA.
All non-exempt NIH extramural research, grant oversight, and data collection will be suspended.
The Occupational Safety and Health Administration (OSHA) has largely ceased routine enforcement and consultation activities during the shutdown, with only emergency inspections continuing. According to Lab Manager, the agency has suspended “most programmed inspections and compliance assistance,” retaining only personnel necessary to respond to “imminent danger situations” and fatalities. This means laboratory safety programs will receive no regular oversight until funding is restored, placing greater responsibility on lab leaders to maintain compliance and documentation internally.
Key Impacts for Laboratory Leaders
While grant proposals may still be submitted in some cases, their review and processing are stalled, according to Lab Manager. Further, labs awaiting FDA approvals or oversight (e.g. for devices, reagents, protocols) may see deliverables and timelines move unpredictably.
Without regular EPA permitting, inspections, or enforcement, labs that rely on environmental permits must sustain internal compliance vigilance in the absence of federal oversight.
Agencies that supply routine safety, epidemiological, or environmental data are scaling back to minimal essential operations, potentially leaving labs with delayed access to critical datasets.
In many agencies, core capabilities are cut to only those functions required to protect human life or property.
What Lab Leaders Should Do Now
Revisit project timelines: Recognize that regulatory submission dates, funding disbursements, and permit cycles may shift.
Document internal compliance: Maintain logs, audits, and safety checks independent of federal interaction.
Communicate with stakeholders: Funders, collaborators, and regulatory bodies should be notified of possible delays.
Prioritize essential operations: Identify which experiments, sample storage, or assays must continue even under constrained oversight.
Monitor agency updates: Shutdowns evolve, and agencies may alter which functions are considered “essential” or “excepted.”
Recent laws in California, Utah, and Texas define new compliance standards for clinical laboratories employing AI in diagnostic and clinical messaging.
When it comes to oversight of artificial intelligence (AI) use in clinical laboratory, it behooves lab leaders to watch what is happening on the state level. In some cases, disclosure of AI use is a threshold states are monitoring.
For example, California Assembly Bill 3030, which went into effect Jan. 1, 2025, mandates transparency when generative AI is used in healthcare. Any health facility, laboratory, clinic, physician’s office, or group practice that employs generative AI to create patient communications about clinical information must include:
A prominent disclaimer stating the content was AI-generated.
Clear instructions that inform patients how to speak directly with a human clinician.
If a licensed provider reviews and approves the AI-generated communication, these requirements are waived. AB 3030 applies only to clinical—not administrative—messages. Non‑compliance can result in disciplinary actions from state regulators.
Laboratories using AI in patient-facing contexts should ensure their workflows include AI‑disclaimers, human‑review triggers, and clear ways for patients to contact providers.
“Symposium Cisco Ecole Polytechnique 9-10 April 2018 Artificial Intelligence & Cybersecurity” by Ecole polytechnique / Paris / France is licensed under CC BY-SA 2.0.
AI Disclosure in Utah
Meanwhile, Utah Senate Bill 226 updates its Artificial Intelligence Policy Act, tightening rules around how healthcare entities—including clinical labs—use generative AI in patient interactions. The rules went into effect May 7, 2025.
Under the state’s law, labs must disclose AI use only when:
A patient explicitly asks whether they’re interacting with AI, or
The lab uses AI in high-risk communications, such as delivering test interpretations, diagnostic results, or clinical advice.
Routine AI use in back-end operations or non-clinical messaging does not require disclosure.
A safe harbor provision protects labs from penalties if the AI system clearly identifies itself as non-human at the beginning and throughout the interaction.
Labs that use AI-generated content in patient portals, chatbots, or outreach must ensure compliance or face consumer protection penalties.
New Texas Law on AI
Texas passed a law in June that goes into effect Sept. 1, 2025, the regulates how AI is used within electronic health records (EHRs).
According to the law, providers that use AI for recommendations on diagnosis or treatment based on a patient’s medical record must review all information obtained through AI to ensure its accuracy before entering the information into a patient’s EHR.
The law also “imposes a strict data localization mandate, prohibiting the physical offshoring of electronic medical records,” law firm Holland & Knight noted. “This requirement applies not only to records stored directly by healthcare providers but also to those maintained by third-party vendors or cloud service providers.”
Federal investigations into UnitedHealth’s Medicare billing could impact clinical labs and reshape diagnostic workflows.
The intensifying federal investigation into UnitedHealth Group’s Medicare Advantage billing practices is making headlines in both major outlets and industry-specific trade publications. Clinical laboratories have the potential to soon feel the effects. As questions grow around how the insurance giant gathers and codes medical diagnoses, labs that play a role in confirming those diagnoses could see heightened regulatory oversight, increased documentation requirements, and a more complex reimbursement landscape.
According to an article from The Associated Press, on July 24, UnitedHealth Group, the largest U.S. provider of Medicare Advantage (MA) plans, revealed in a Securities and Exchange Commission (SEC) filing that it is now cooperating with both criminal and civil investigations by the Department of Justice (DOJ). The probes are centered on allegations that the company inflated patient diagnoses in order to receive larger payments from the federal government. These investigations, which were first surfaced in reports by The Wall Street Journal earlier this year, are now confirmed.
UnitedHealth Comments on Investigation
UnitedHealth said it initiated contact with the DOJ after the reports came to light and is already responding to information requests. The company also announced it has launched a third-party review of its business policies and performance metrics, which is expected to conclude by the end of the third quarter, according to comments made to CNBC.
“UnitedHealth has full confidence in its practices and is committed to working cooperatively with the Department throughout this process,” the company stated in its filing.
The DOJ’s criminal investigation reportedly includes interviews with doctors about whether they were pressured to submit claims for certain diagnoses that would lead to higher MA payments. A civil inquiry into the company’s billing practices has been underway since February. Both investigations center around suspicions that UnitedHealth used retrospective chart reviews and in-home health assessments—often carried out by clinicians contracted through its Optum unit—to bolster patient risk scores and inflate payments from Medicare.
What this Might Mean for Clinical Labs
Clinical laboratories may be affected, as lab-generated diagnostic data is frequently used to support or validate the conditions coded for reimbursement. If regulators demand greater transparency or auditing of how diagnostic data is linked to MA billing, labs could face increased scrutiny on test utilization, data accuracy, and coding practices.
CNBC reported that UnitedHealth has pushed back against some of the scrutiny. The company noted that Centers for Medicare & Medicaid Services (CMS) audits have found its practices to be “among the most accurate in the industry.” It also cited a special master’s recommendation in March in an ongoing legal case stemming from a whistleblower complaint that accused the company of withholding $2 billion in Medicare payments. In that case, the special master concluded that the DOJ had insufficient evidence to proceed.
As for the timing of the DOJ confirmation, UnitedHealth has had a challenging year. The company has endured stock volatility, leadership upheaval, and broader reputational risks. In May, CEO Andrew Witty abruptly resigned, and earlier in the year, the firm dealt with the fatal shooting of UnitedHealthcare CEO Brian Thompson in New York City. UnitedHealth is also still recovering from a massive cyberattack that disrupted operations across its network.
“This all sounds logical as it moves forward with a new CEO,” wrote Jared Holz, healthcare strategist at Mizuho Securities, in a note to clients July 24, while noting that UnitedHealth had previously denied being under federal investigation.
Jared Holz, Mizuho healthcare sector strategist, said UnitedHealth’s choice to acknowledge the probes and cooperate with the department “all sounds logical as it moves forward with a new CEO.”
The Medicare and Retirement division, which includes the Medicare Advantage business, brought in $139 billion in revenue last year, making it UnitedHealth Group’s largest segment. But medical costs have surged, particularly among new MA enrollees. UnitedHealth suspended its 2025 forecast and withdrew guidance altogether in May due to financial uncertainty.
For clinical labs, payers, and providers, the situation underscores a growing federal focus on Medicare Advantage oversight, potentially reshaping not only billing practices but also the data and diagnostics behind them.
