Appropriate Medicare reimbursement for clinical laboratory services has long been a hot topic in the provider community, particularly following the implementation of the Protecting Access to Medicare Act (PAMA) over a decade ago. As the Centers for Medicare and Medicaid Services (CMS) and Congress revisit data reporting requirements, physician practices with in-office laboratories are once again facing significant reporting requirements and compliance ramifications.
If your practice operates an in-office laboratory that bills Medicare, you should be preparing now for the rapidly approaching CMS data reporting deadline. Failure to act promptly could expose your practice to significant compliance risk and potential financial penalties.
PAMA and the 2026 Reporting Requirement
Enacted in 2014, PAMA directed CMS to establish a Medicare clinical laboratory fee schedule based on private payor payment data. In 2017, CMS implemented a data collection and reporting framework for applicable laboratories, including many physician practice-based labs. However, that framework was widely criticized as burdensome and insufficiently publicized to affected providers, and resulting lack of robust reporting by providers led to significant reductions in Medicare reimbursement rates for many common laboratory services.
After multiple legislative delays, Congress has now reinstated reporting requirements through the Consolidated Appropriations Act of 2026. As a result, laboratories, including many physician office laboratories, must comply with new CMS data reporting obligations by July 2026.
What Physician Practices Should Be Doing Now
If your practice operates an in-office laboratory, you should be addressing the following critical compliance questions now:
- Is your practice subject to the CMS reporting requirements based on your Medicare revenue and billing structure?
- If you are required to report, can your billing system accurately extract the private payor payment data required for CMS submission?
- Do you understand the mechanics of CMS reporting, including portal registration, data submission requirements, and who within your organization must certify the data?
These questions are central to determining whether your practice is prepared to meet CMS reporting obligations. Identifying gaps now is critical, as delays or incomplete data submissions can create significant compliance exposure and operational disruption.
CMS requires accurate and complete reporting by all providers who meet the threshold eligibility criteria. Failure to comply, including failure to report or submission of inaccurate data, may result in substantial civil monetary penalties of up to $10,000 per day for each violation, and increased regulatory scrutiny.
Physician practices with in-office laboratories should immediately assess whether they qualify as “applicable laboratories” under PAMA and applicable CMS regulations. Practices should also work closely with internal billing teams or third-party vendors to ensure systems are capable of capturing and validating the required data well in advance of the applicable reporting deadline.
How Frier Levitt Can Help
Frier Levitt advises physician practices nationwide on Medicare compliance, reimbursement strategy, and regulatory risk. Our attorneys assist providers in evaluating whether they are subject to CMS reporting requirements, assessing data capture capabilities, and developing compliant reporting processes under PAMA. We also work with practices to mitigate enforcement risk, respond to regulatory inquiries, and ensure alignment with evolving CMS requirements. Additionally, Frier Levitt provides PAMA advisory services, conducts compliance audits of existing laboratory billing practices, and counsels clients on structuring in-office laboratory operations to minimize regulatory exposure.
If your practice operates an in-office laboratory, contact us to ensure you are prepared for upcoming PAMA reporting obligations and positioned to avoid costly compliance issues.
Senior Counsel
