Major PAMA Updates for 2026: What Clinical Laboratories Need to Know Now

Laboratory reimbursement is back in the spotlight and the stakes are higher than ever before.

Congress has enacted new changes to the Protecting Access to Medicare Act, better known as

PAMA, that will directly impact how clinical laboratories are reimbursed in 2026 and beyond.

While recent action has provided temporary relief, it has not removed the long term financial and

operational risks laboratories are facing.

According to the Centers for Medicare and Medicaid Services, PAMA governs how private

payer data is collected and used to set Medicare payment rates under the Clinical Laboratory

Fee Schedule.

Key PAMA Updates for 2026

Recent Congressional action includes several critical changes:

• Medicare payment cuts of up to 15 percent on nearly 800 laboratory tests have been delayed

• through December 31, 2026

• The private payer data collection period is January 1 through June 30, 2025

• The data reporting window is May 1 through July 31, 2026

• Lawmakers continue to pursue permanent reform through the bipartisan RESULTS Act
  
  

CMS publishes official timelines and reporting requirements for PAMA private payer data

reporting here.

Without this delay, laboratories would have faced significant Medicare reimbursement

reductions beginning February 1, 2026. For many independent and hospital outreach

laboratories, that would have translated into millions of dollars in lost revenue almost overnight.

The delay is meaningful, but it is not a solution.

The Financial Reality Laboratories Are Already Facing

Even without new PAMA cuts, laboratory revenue is under sustained pressure. Industry data consistently shows that clinical laboratories lose three to five percent of net revenue each year due to preventable revenue cycle issues, including:

• Claim denials tied to medical necessity

• Incorrect or missing modifiers

• Inaccurate payer mapping

• Manual data entry errors

• Inconsistent front end validation
  
  

At the same time, payer scrutiny continues to intensify, particularly in high growth areas such as

molecular diagnostics and toxicology. A single billing error can now result in a full denial rather

than a partial adjustment.

CMS publishes current Medicare laboratory payment rates and policy updates under the Clinical

Laboratory Fee Schedule.

The Numbers Laboratories Cannot Ignore

• Up to 15 percent Medicare cuts remain possible in the future

• Laboratories face penalties of up to ten thousand dollars per day for inaccurate private payer data reporting

• Denial rates for specialty testing continue to rise year over year

• Manual billing workflows increase compliance risk and slow cash flow
  
  

The U.S. Department of Health and Human Services Office of Inspector General outlines civil

monetary penalties related to reporting inaccuracies and noncompliance here.

In this environment, reactive billing is no longer sustainable.

A New Standard for Laboratory Revenue Cycle Management

Laboratory billing has fundamentally changed, you already know this. 

High performing laboratories are shifting away from back end cleanup and toward upstream

prevention.

That includes:

• Validating orders before submission

• Confirming medical necessity at the front end

• Applying payer specific edits and rules early

• Ensuring correct modifiers before claims are sent
  
  

Laboratories that rely heavily on manual processes experience:

• Higher denial rates

• Longer days in accounts receivable

• Increased audit exposure

• Greater operational strain on staff
  
  

To support this shift, many laboratories are investing in modern laboratory revenue cycle

management platforms that prioritize automation and accuracy from the start.

What Laboratories Should Be Doing Now

Regardless of how PAMA ultimately unfolds, laboratories should take action now.

• Review private payer contracts and fee schedules for accuracy

• Audit payer mapping to avoid reporting errors that can lock in underpayments

• Strengthen front end order validation to improve first pass claim acceptance

• Automate medical necessity and payer specific rule checks

• Prepare for the transition to fully electronic CLIA systems in 2026

• Confirm your billing platform and RCM partner truly understand laboratory reimbursement
  
  

Why Experience Matters Right Now

Laboratory billing is highly specialized and constantly evolving. For nearly 50 years, Advanced Data Systems has helped healthcare organizations navigate complex reimbursement environments. Laboratory billing has always been one of our core areas of expertise.

We work with independent laboratories, hospital outreach programs, pathology groups, and

specialty testing facilities nationwide. We have guided clients through every major

reimbursement shift the industry has faced, including PAMA.

How ADS Helps Laboratories Protect Revenue

ADS laboratory billing solutions are purpose built for the realities laboratories face every day.

Our technology and services help laboratories:

• Reduce denials before claims are submitted

• Automate payer specific edits and medical necessity validation

• Improve clean claim rates

• Accelerate cash flow

• Maintain compliance with complex Medicare and payer requirements

• Gain clear visibility into financial performance
  
  

Our laboratory billing services combine powerful software with experienced revenue cycle

professionals who understand the nuances of laboratory reimbursement.

Preparing for What Comes Next

PAMA delays offer breathing room, not certainty.

• Reimbursement rules will continue to change

• Reporting requirements will grow more complex

• Payer scrutiny will increase
  
  

Congressional efforts such as the bipartisan RESULTS Act aim to reform how laboratory

payment rates are set, but long term outcomes remain uncertain.

Laboratories that succeed will be those with modern billing infrastructure and experienced

partners who understand what is coming next.

Ready to Strengthen Your Laboratory Revenue Cycle

If your laboratory is concerned about declining reimbursements, rising denials, or the complexity

of upcoming PAMA reporting, now is the time to act.

Learn how ADS laboratory billing software and revenue cycle services can help protect your

revenue and simplify compliance with a FREE no obligation 30-min consolation with one of our lab billing experts to see what opportunities you may be missing .

With nearly five decades of experience, ADS helps laboratories get paid accurately, compliantly,

and consistently today and into the future.