Software as a Medical Service gets new status indicator O1; algorithmic analyses of prior lab tests move from the CLFS to the OPPS
Published November 8, 2026 · Coverage November 1–7, 2026, Pacific · Lower priority
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.
Recommended action
- Identify any SaMS or secondary-analysis lab codes billed by the hospital and confirm CY 2027 status indicators in Addendum B
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.
Read the entire Medicare & Medicaid Sweep report →