Advocacy - Comment Letter
Dear Sir/Madam:
The Association for Diagnostics & Laboratory Medicine (ADLM) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) July 7, 2026 proposed revisions to the Hospital Outpatient Prospective Payment System (OPPS) and Medicare Ambulatory Surgical Center (ASC) Payment System. Within the document the agency recommends the adoption of a new payment policy for software-based medical services used in algorithmic analyses. This provision is the focus of ADLM’s comments.
CMS states that existing reimbursement policy for software as a medical service (SaMS) “may create significant vulnerabilities for the Medicare program” because these tests are paid under the Clinical Laboratory Fee Schedule (CLFS) and not “subject to beneficiary cost-sharing or budget neutrality.” To address this concern, the agency asserts these services are not clinical diagnostic tests and therefore may be performed by non-CLIA certified entities, allowing CMS to remove them from the CLFS.
ADLM is concerned that this payment-driven approach does not adequately consider the regulatory implications or potential effects of this change on patient care. While we agree that the level of regulatory oversight for these algorithmic services warrants discussion, this payment rule is not the proper venue. ADLM recommends that CMS withdraw the proposal and engage the broader healthcare community in a dialogue on the appropriate regulatory model for these tests.
In the proposed rule, CMS suggests that secondary analyses of test results may be performed by non-CLIA laboratories because specimen collection, quality control, testing, result generation, and interpretation have already occurred. CMS views subsequent use of those data to generate patient-care information as distinct from the laboratory testing process and outside CLIA oversight. ADLM believes this characterization is inaccurate as it fails to take into consideration the laboratory’s central role in this process. As CMS assesses this proposal, it should consider the following:
In the proposal, CMS identifies several secondary analyses that it characterizes as non-clinical diagnostic tests, which do not need to be performed by a CLIA-certified laboratory. The agency suggests that once a test result is generated, subsequent computations using those data qualify as “other diagnostic tests” under section 1861(s)(3) of the Social Security Act and are not eligible for CLFS reimbursement.
A review of the data in Table 62 indicates that most analytical methods used for these tests are poorly harmonized, requiring laboratory expertise to align locally generated data with the model’s training inputs. For example, digital-pathology morphology and stain intensity have no cross-scanner or cross-stain reference standard and shift measurably with tissue processing, staining, and scanner; most quantitative chemistry and immunoassays yield method-specific numeric values and reference intervals for the same measurand. In these cases, the computation is not separable from the examination; it is part of it, and the service meets the 493.2 definition of a CLIA laboratory. The image-analysis codes (0512U, 0513U, 0414U, 0418U, 0220U, 0376U) and the functional cell-culture assay (0511U) listed in Table 62 rely upon non-harmonized inputs and remain clinical diagnostic laboratory tests; 0510U is the exception.
Clinical laboratories operate within a quality-focused regulatory framework designed to protect patients by ensuring that test results are accurate, reliable, and clinically meaningful. Separating algorithmic clinical decision-making from the upstream processes that generate the underlying data—without applying comparable quality management expectations—could increase the risk that patient care decisions are based on incomplete, inconsistent, or unreliable information.
If CMS wants to expand testing of secondary analyses to non-CLIA laboratories, it should first specify how these facilities will be regulated to ensure the accuracy, reliability, and appropriate use of these services, including how these data will be validated, meet quality control standards, monitor performance, report results, and provide meaningful interpretation. ADLM urges CMS to withdraw this provision from the proposed rule and address the oversight and patient care questions before moving forward with changes to the payment system.
Thank you for considering ADLM’s comments. If you have any questions, please email Vince Stine, PhD, ADLM’s Chief Policy Officer, at [email protected], or Evan Fortman, MPA, ADLM’s Manager of Government Affairs, at [email protected].
Sincerely,
Stanley F. Lo, PhD, DABCC, FADLM
ADLM President