Medical imaging and telemedicine are becoming increasingly popular these days. Because of the increased interest in keeping and distributing medical pictures, memory space and transmission bandwidth are in short supply. Compression was developed in response to these problems. The major purpose of lossless image compression is to enhance compression efficiency, reduce bit rate, and boost accuracy for medical image storage and transmission while maintaining acceptable image quality for diagnosis. Background suppression for lossless picture compression utilising fuzzy clustering is implemented in this article. . In this initially input images are given as inputs. Pre-processing image is applied to the input images. Fuzzy clustering process is applied to the pre-processed image. For this preprocessed image thresholds are computed. Now framework is constructed based on the computed thresholds. If there is noise generated in the framework then noise is reduced by averaging the frame. After generating the frame casting technique is applied to the boundary’s. In this image pixels are obtained from boundary’s. Mask is obtained for the image pixels by applying background image suppression. For this suppressed image loss less image compression technique is applied. At last compressed image is encoded using encoded image. From results it can observe that image quality, compression efficiency, accuracy will be improved and error bit rate & storage level is reduced.