The testing service providers hope the legislation, which would reform the CMS’ reimbursement rate-setting process, can cross the finish line in Congress’ lame-duck session.

Bracing for Medicare and Medicaid reimbursement cuts in 2027, Labcorp and Quest Diagnostics continue to push for Congress to pass legislation before year-end that would revamp the payment rate-setting process.

In third-quarter earnings calls, the CEOs of both leading clinical laboratory companies said the proposed fee schedule changes, set to begin Jan. 1, would clip revenues next year. Labcorp anticipates a $125 million hit from the government payment reductions in 2027, while Quest quantified the impact as roughly 1% of 2026 revenue.

The Centers for Medicare and Medicaid Services’ preliminary clinical laboratory fee schedule, released last month, would lower payments by 15% on 775 tests for 2027, with more reductions in 2028 and 2029, according to the American Clinical Laboratory Association. The CMS expects to finalize the payment rates in November.

“In our view, these payment cuts will threaten patient access to laboratory services, they will negatively impact patient care and innovation, and they will impact the viability of laboratories across the United States,” Labcorp CEO Adam Schechter said Wednesday on the company’s call.

The Protecting Access to Medicare Act of 2014, or PAMA, overhauled how clinical diagnostic lab tests are paid by tying payments to private payer market rate data. The industry argues the data collection process overestimates independent labs’ share of the market.

“The preliminary fee schedule is not fully representative of the broader commercial laboratory market,” said Schechter.

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