Two Companies Control America's Lab Testing

When your doctor orders a blood test, there's a good chance it ends up at one of two companies: Laboratory Corporation of America (LabCorp) or Quest Diagnostics. Together, these two corporations operate 37 separate NPIs across the country and have billed Medicare $14.3B over the past decade — representing 25.0% of all clinical laboratory payments.

LabCorp: 15 NPIs, $7.5B

LabCorp operates under 15 separate National Provider Identifiers across the country, each representing a different laboratory location. Their largest operation in Burlington, NC alone billed $2.2B over the decade — making it one of the single highest-billing NPIs in all of Medicare.

Quest Diagnostics: 22 NPIs, $6.8B

Quest Diagnostics operates an even more fragmented network with 22 separate NPIs. Their Tampa, FL location is the largest single NPI at $1.0B, followed by Clifton, NJ at $927.2M.

Is This a Monopoly Problem?

Clinical laboratory testing is a $57.2B Medicare market over 10 years, with 29.8K total providers. But those numbers are misleading — the vast majority of those providers are small hospital labs and independent pathology groups.

LabCorp and Quest don't just share 25.0% of Medicare lab payments. In the commercial lab market — the reference testing that doctors order and send out — their combined market share is estimated at over 50%. They set pricing, they negotiate with insurers, and they define turnaround times that independent labs must match or beat.

The Independent Lab Squeeze

For every LabCorp or Quest mega-laboratory, there are thousands of independent labs competing for a shrinking share of Medicare reimbursement. The Protecting Access to Medicare Act (PAMA) of 2014 fundamentally changed lab reimbursement by requiring CMS to set rates based on weighted median private payer rates — rates largely set by LabCorp and Quest through their massive insurer contracts.

The result: independent labs saw Medicare reimbursement rates cut by 10% or more in successive years, while the two giants — with their economies of scale — could absorb the cuts. Critics called it a "death spiral" for independent labs. The American Clinical Laboratory Association fought the cuts, and Congress delayed full implementation multiple times.

The Case for Scale

Defenders of the duopoly argue that scale brings benefits: faster turnaround times, broader test menus, consistent quality standards, and lower per-test costs. A LabCorp reference lab in Burlington, NC can process millions of specimens per year with automation that a small independent lab simply can't match.

And at $13.02 per service, LabCorp and Quest actually bill below the industry average of $31.34 per service. The cost efficiency argument has merit.

The Case Against

But consolidation in any market raises concerns. When two companies control the majority of reference testing, they also control:

• Pricing power — their private payer rates become the benchmark for Medicare reimbursement
• Test availability — they decide which esoteric tests to offer or retire
• Data monopoly — with billions of test results, they hold unparalleled population health data
• Acquisition strategy — both companies routinely acquire independent labs, further consolidating the market

What the Numbers Don't Show

Our data captures Medicare Part B fee-for-service laboratory payments. It doesn't capture:

• Medicare Advantage lab billing (a growing share of Medicare)
• Commercial insurance laboratory revenue (the majority of their business)
• Direct-to-consumer testing (a fast-growing segment)
• COVID testing revenue (which was enormous for both companies in 2020-2022)

The $14.3B in Medicare payments we can see is likely just the tip of the iceberg. Both companies report annual revenues exceeding $15 billion, with Medicare representing a meaningful but not dominant share.

The Bottom Line

Two companies, 37 NPIs, $14.3B in Medicare payments. Whether you see this as efficient consolidation or dangerous monopolization depends on your perspective. What's undeniable is the scale: in a healthcare system where most providers bill Medicare thousands or tens of thousands per year, LabCorp and Quest bill billions.