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Software as a Medical Service gets new status indicator O1; algorithmic analyses of prior lab tests move from the CLFS to the OPPS

CMS renamed these services Software as a Medical Service (SaMS), assigned them to New Technology Ambulatory Payment Classifications (APCs) at rates close to CY 2026 as an interim policy, and created status indicator O1. Stand-alone algorithmic analyses of prior laboratory test data, such as secondary genomic sequencing analyses, move from the Clinical Laboratory Fee Schedule (CLFS) to the Hospital Outpatient Prospective Payment System (OPPS) as other diagnostic tests.

Background

CMS says there have been rapid developments in the use of software-based technologies to diagnose disease and support clinical decision-making in outpatient and physician office settings, and it calls the SaMS assignment an interim policy while it considers a longer-term payment methodology. Through CY 2026, stand-alone algorithmic analyses of prior laboratory test data are paid under the CLFS as diagnostic laboratory tests; the move to the OPPS applies for CY 2027.

Who this affects

Hospital outpatient departments billing software-based diagnostic services (Software as a Medical Service) and secondary genomic or algorithmic laboratory analyses.

Why it matters

Inference: lab and billing teams must change the payment system and claim type assumptions for affected secondary-analysis codes from January 1, 2027.

Scope and timing

Authority status
Final
Responsible owner
Laboratory / Revenue Cycle
Publication date
2026-11-06
Effective date
2027-01-01

Not established

Affected code list not retrieved.

Sources

Complete edition and supplemental material

This article in the complete report →

Executive triage, source-coverage limitations, context and forward horizons remain in the complete report.

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