This delay does not alter the reporting requirements or thresholds for being an “applicable laboratory.” Hospitals should take advantage of this additional time to verify their qualification and gather complete, accurate data to prevent financial and compliance issues.
Are You an “Applicable Laboratory”?
According to CMS’s current CLFS Reporting guidance, a laboratory (including a hospital outreach lab) must report if it meets all of the following:
- Bills Medicare Part B for Clinical Diagnostic Laboratory Tests
- Either under its own NPI, or
- As a hospital outreach laboratory on institutional claims (CMS‑1450) with Type of Bill 14x.
- Meets the majority‑of‑Medicare‑revenues test
- More than 50% of its total fee-for-service Medicare revenues for the data collection period come from the CLFS and/or the Physician Fee Schedule (PFS).
- For many CLIA-certified hospital outreach labs, almost all Medicare payments come from CLFS or PFS. The CLFS/PFS amount is typically equal to total Medicare payments, making it likely the Medicare revenue test will be met.
- Meets or exceeds the low expenditure threshold
- Receives at least $12,500 of its fee-for-service Medicare revenues from the CLFS during the 2025 data collection period.
- To check this rule, add up CLFS payments by NPI or by 14x Type of Bill for hospital outreach labs. This can be accomplished by reviewing your PS&R report for this period.
- Medicare Advantage (Part C) payments are excluded. They are not considered “Medicare revenues” for either the majority-of-revenue or low-expenditure calculations.
If these criteria are met, the lab is an applicable laboratory and must report its private payment rates and related volumes for CDLTs during the 2026 period.
Penalties and Risk
- Civil monetary penalties: If the Secretary determines that an applicable laboratory failed to report, or made a misrepresentation or omission, CMS may impose civil monetary penalties of up to $10,000 per day for each failure, misrepresentation, or omission.
- Payment impact: If data is incomplete or inaccurate, it can distort the weighted median of private-payer rates. This may cause deeper CLFS cuts when new rates take effect, affecting hospital lab revenue for several years.
We can help
Our experts are available to address questions, test your hospital’s eligibility to report, or help your Hospital determine private payer rates for Medicare reporting. Contact us today.
