By Bill Alpert
U.S. House representatives heard the clinical lab industry plead yesterday for a reprieve from looming cuts as large as 15% in what Medicare pays Labcorp Holdings, Quest Diagnostics and cancer-testing specialists like Guardant Health, Exact Sciences, and Natera.
Starting February, a current law will require labs to tell Medicare the rates that private insurers paid for tests back in 2019. Medicare will then cut its own test payments to those levels in 2027.
That will hurt the development of technologies like the genomic tests now used for diagnosing cancer patients and sick infants, said American Clinical Laboratory Association President Susan Van Meter, at a Thursday hearing on Medicare reimbursement rates.
"Sustained cuts of such a large magnitude threaten patient access to lifesaving diagnostics and reduce investment in the next generation of clinical diagnostics," Van Meter told the Health Subcommittee of the House Energy & Commerce Committee.
The February deadline exists because of a law passed 10 years ago that made clinical labs the only healthcare industry whose Medicare rates would match those paid by private insurers. Commercial rates were first surveyed in 2016 and Medicare cut its test payments by up to 10% in each year from 2018 to 2020. The resulting $4 billion in cuts was four times what Congress had projected.
After labs and hospitals complained that Medicare's rates were based on a tiny, unrepresentative sample of the private market, Congress froze Medicare lab rates in 2020. Every year since, the freeze has been extended. The latest extension ends Jan. 31.
A bipartisan group of representatives and senators is pushing a new bill called the Results Act that would extend Medicare's rate freeze until 2028. Beginning in 2029, Medicare test rates would be based on a widely used independent database of commercial payments.
"While today's hearing is an early step towards passing the Results Act, we were encouraged by the bipartisan support during the hearing," wrote Guggenheim analyst Subbu Nambi in a Thursday note.
The most likely way the Results Act will get passed, said Nambi, will be as an attachment to a larger piece of healthcare legislation or a reconciliation bill at the end of the month.
Write to Bill Alpert at william.alpert@barrons.com
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(END) Dow Jones Newswires
January 09, 2026 14:24 ET (19:24 GMT)
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