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Clinical Laboratory Fee Schedule

Outpatient clinical laboratory services are paid based on a fee schedule in accordance with Section 1833(h) of the Social Security Act. Payment is the lesser of the amount billed, the local fee for a geographic area, or a national limit. In accordance with the statute, the national limits are set at a percent of the median of all local fee schedule amounts for each laboratory test code. Each year, fees are updated for inflation based on the percentage change in the Consumer Price Index. However, legislation by Congress can modify the update to the fees. Co-payments and deductibles do not apply to services paid under the Medicare clinical laboratory fee schedule.

Each year, new laboratory test codes are added to the clinical laboratory fee schedule and corresponding fees are developed in response to a public comment process. Also, for a cervical or vaginal smear test (pap smear), the fee cannot be less than a national minimum payment amount, initially established at $14.60 and updated each year for inflation.

Critical access hospitals are paid for outpatient laboratory tests on a reasonable cost basis, instead of by the fee schedule. Hospitals with fewer than 50 beds in qualified rural areas—those with population densities in the lowest quartile of all rural areas—are paid based on a reasonable cost basis for outpatient clinical laboratory tests for cost reporting periods between July 2004 and July 2006.

Clinical Laboratory Center

For a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) clinical laboratory providers and suppliers, go to the Clinical Laboratory Center (see under "Related Links Inside CMS" below).