Medicare Laboratory Test Expenditures Increased in 2018, Despite New Rate Reductions

Effective in 2018, the Medicare program changed the way it sets payment rates for clinical diagnostic laboratory tests (lab tests). CMS replaced the previous payment rates with new rates based on private payer data collected from labs. This is the first reform in 3 decades to Medicare's payment system for lab tests. As part of the same legislation reforming Medicare's payment system, Congress mandated that OIG monitor Medicare payments for lab tests and the implementation and effect of the new payment system for those tests.