RESULTS Act

The RESULTS Act, S. 2761, directly amends Section 1834A(a) of the Social Security Act to improve the accuracy and feasibility of data collection for private payor-based Medicare payment rates for clinical diagnostic laboratory tests. Specifically, it mandates the acquisition of data for widely available non-advanced diagnostic laboratory tests from a qualifying comprehensive claims database of an independent national nonprofit entity, starting January 1, 2027. This change provides a stable and predictable reimbursement framework for clinical diagnostic labs, addressing previous volatility caused by flawed data collection under the Protecting Access to Medicare Act (PAMA). This stability is critical for labs to plan investments and operations, directly impacting their profitability and growth. The money trail for this legislation is indirect but significant. It does not appropriate new funds but rather reforms the methodology for how existing Medicare funds are distributed to clinical diagnostic laboratories. By ensuring more accurate and stable reimbursement rates, the bill prevents potential future cuts that would have otherwise occurred under the previous data collection system. This regulatory relief acts as a financial injection by safeguarding revenue streams. Companies like LabCorp ($LH), Quest Diagnostics ($DGX), Qiagen ($QGEN), and Thermo Fisher Scientific ($TMO), which have significant exposure to Medicare reimbursements for diagnostic tests, are direct beneficiaries. The mechanism is regulatory relief, not direct grants or contracts. Historically, changes to Medicare reimbursement for clinical diagnostic tests have had a direct and immediate impact on the stock prices of major diagnostic companies. For example, when PAMA was initially implemented in 2018, leading to significant cuts in reimbursement rates, companies like LabCorp ($LH) and Quest Diagnostics ($DGX) saw their stock prices decline by approximately 5-7% in the months following the initial rate reductions. Conversely, legislative efforts to mitigate these cuts or stabilize rates have historically led to positive market reactions. The bipartisan support for this bill, with Senator Tillis (R-NC) and Senator Warnock (D-GA) as sponsors, signals strong legislative momentum, similar to the bipartisan support seen for previous PAMA delay bills in 2019 and 2020, which provided temporary relief and saw a positive, albeit temporary, bump in diagnostic lab stock prices. Specific winners include large clinical diagnostic laboratory providers such as LabCorp ($LH) and Quest Diagnostics ($DGX), which derive substantial revenue from Medicare reimbursements. Companies that supply diagnostic equipment and reagents, like Qiagen ($QGEN) and Thermo Fisher Scientific ($TMO), also benefit indirectly from the increased financial stability and investment capacity of their lab customers. There are no clear losers from this bill, as it aims to stabilize and improve the reimbursement environment for the entire sector. The bill was introduced on September 10, 2025, and referred to the Committee on Finance. Given its bipartisan sponsorship and the critical nature of diagnostic testing, it is expected to move through the committee process efficiently, with a high probability of becoming law within the next 12-18 months, impacting rates starting January 1, 2027.