CMS Proposes Up to 15% Medicare Reimbursement Cuts for Clinical Labs, Hitting Labcorp and Quest Hard

The Centers for Medicare and Medicaid Services released preliminary 2027 Clinical Laboratory Fee Schedule rates on September 22 proposing annual reimbursement cuts of up to 15% for diagnostic testing services. The agency said the proposed reductions are intended to realign Medicare payments with private-insurer rates, based on an analysis of more than 6,400 laboratories, and that Medicare and Medicaid have been overpaying labs including Labcorp for years.

Labcorp shares fell roughly 4.5% to 6.2% in early trading, with the stock among the laggards in S&P 500 premarket activity. Peer Quest Diagnostics dropped approximately 6.9% in the premarket on the same news. Both stocks saw sharply elevated trading volume in the early hours of the session. Labcorp also filed an 8-K with the SEC on September 22 in connection with the CMS announcement.