Why this Newsletter
Companies developing clinical laboratory algorithmic tests may want to evaluate if their tests could be affected by the Centers for Medicare and Medicaid Services (CMS) proposal to reclassify the payment methods for algorithmic analyses.
Even if a company’s clinical laboratory algorithmic tests are not intended for the Medicare population, it would be wise to evaluate this CMS proposal because Medicare proposals and decisions can affect the entire US health insurance market.
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In July 2026 CMS released its proposal to reclassify (standalone) clinical laboratory algorithmic tests that use existing lab data such as AI pathology reviews and genomic re-analysis currently paid under the Medicare Clinical Laboratory Fee Schedule (CLFS) to the Medicare Hospital Outpatient Prospective Payment (OPPS) System and change how physicians are reimbursed by Medicare.
CMS’s argument for the CLFS reclassification is standalone clinical laboratory algorithmic tests do not need a CLIA- certified laboratory to be performed. The reason results from genomic re-analysis or images used in AI pathology reviews use existing lab data. Another way to look at it is services such as genomic re-analysis and AI pathology reviews are no longer considered tests because they use existing, not new, data to be preformed.
The Clinical Laboratory Fee Schedule is the Medicare payment system for the laboratory. Payment that is reimbursement from Medicare may be available for the laboratory when the test is performed by a laboratory certified under the Clinical Laboratory Improvement Amendments known as CLIA.
The Clinical Laboratory Fee Schedule is the Medicare payment system is also used to pay for physician work required in routine lab tests. Here the physician payment amount is a national USD$ payment rate based on private-payer weighted median USD$ rates. CMS is proposing to do away with the national private payer median rates methodology and have the Medicare Administrative Contractors (MACs) determine the physician payment rate.
Companies developing or selling algorithmic tests in the US market laboratory that do not use existing data may want to be on the lookout for a CMS proposal similar to what is described above.
Details of CMS’s proposal for Clinical Laboratory Algorithmic Tests can be found in the CY 2027 Hospital Outpatient Prospective Payment System (OPPS) proposed rule https://www.federalregister.gov/documents/2026/07/07/2026-13656/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment and the CY 2027 Physician Fee Schedule (PFS) proposed rule https://www.federalregister.gov/documents/2026/07/16/2026-14327/medicare-and-medicaid-programs-cy-2027-payment-policies-under-the-physician-fee-schedule-and-other
This newsletter is for illustrative purposes only.
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About Rowinski Group
2026 marks the 22nd year in business for Rowinski Group LLC. Rowinski Group is a global reimbursement and healthcare payer data analytics consultancy for medical devices, digital health and diagnostics companies who are developing for and selling in the U.S healthcare market. Rowinski Group has offices in Silicon Valley – San Francisco Bay area, Minneapolis and Portland.
Rowinski Group has two core service offerings; securing codes and reimbursement on behalf of our company clients and using healthcare payer data analytics to help our companies solve their business issues like responding to questions from the FDA and Medicare, sales forecasting, building marketing models, Key Opinion Leader (KOL) identification.
Through our service offerings Rowinski Group assists companies from around the work to establish and build their U.S. market share. https://www.rowinskigroup.com
