CMS did not just float a generic AI payment idea. In the CY 2027 OPPS proposed rule, CMS names the category: Software as a Medical Service (SaMS). The proposal would create a new OPPS status indicator, move dozens of algorithm-driven services into New Technology APCs, and pull certain laboratory algorithm analyses out of the Clinical Laboratory Fee Schedule.
The proposed new OPPS status indicator for SaMS: "Software as a Medical Service, paid under OPPS; separate APC payment." Functionally, CMS proposes it would pay like status indicator S for CY 2027.
This is the first real attempt to give AI-driven diagnostic software its own Medicare outpatient payment architecture instead of forcing it into legacy buckets built for supplies, equipment, physician work, or lab wet-work.
The language matters. CMS says it is changing terminology from Software as a Service, or SaaS, to Software as a Medical Service because SaaS means something very different in the broader tech market. SaMS is CMS' proposed term for software-based technologies that support clinical decision-making through algorithmic analysis, including clinical or diagnostic functionality.
For revenue cycle teams, the important part is not the branding. It is the payment mechanics underneath it.
In section X.B. of CMS-1850-P, CMS lays out an interim CY 2027 payment policy for SaMS while it works on a more comprehensive long-term methodology. The agency is explicit about the problem: Medicare Part B payment systems were built around material resources, while these tools are driven by proprietary algorithms, scalable non-material costs, subscription arrangements, license fees, and per-use or "per-click" pricing.
CMS' proposed CY 2027 bridge policy has five operational pieces:
CMS is not saying every AI tool gets paid. It is saying a defined set of SaMS services should be identified consistently, many should be routed through New Technology APCs, and separately paid SaMS should carry a distinct O1 status indicator.
CMS is clear that the existing clinical APC structure does not fit SaMS well. Clinical APCs are cost-based and claims-data-driven. SaMS costs are harder to observe because the core value is the algorithm, not a consumable supply or a predictable staff/time input. CMS also flags program integrity concerns around subscription-based and per-click models.
The interim solution: use New Technology APCs for CY 2027 as a standardization step. That gives CMS a way to maintain payment continuity while it gathers data and works toward a better long-term valuation model.
That is why this is more than a coding cleanup. CMS is admitting the old payment rails do not map cleanly to AI diagnostic software.
The most important example for cardiology and imaging RCM teams is CPT 75577, the Category I code for AI-QCT: quantification and characterization of coronary atherosclerotic plaque derived from augmentative software analysis of coronary CT angiography data.
CMS walks through the history in section III.C. CPT codes 0623T through 0626T were created in 2021. Only 0625T was separately payable under OPPS beginning October 1, 2022, assigned to APC 1511 with a $950.50 payment rate. Effective January 1, 2026, those Category III codes were deleted and replaced by Category I CPT 75577.
For CY 2027, CMS proposes to designate AI-QCT as SaMS, maintain CPT 75577 in APC 1511 — New Technology Level 11 ($901–$1,000) — with a proposed payment rate of $950.50, and assign the new O1 status indicator.
CMS had low and volatile claims data for the predecessor code, but it is proposing to preserve the APC 1511 assignment anyway under equitable adjustment authority. The agency says CY 2027 is transitional and it wants to avoid disrupting SaMS payment while it builds the broader framework.
The sleeper issue is Table 62. CMS proposes to take 10 algorithmic analyses performed on prior laboratory test data and pay them under OPPS New Technology APCs instead of the Clinical Laboratory Fee Schedule.
That matters because CMS is drawing a line between the original lab test and the downstream software analysis. In CMS' view, once genomic, pathology, or other lab data already exists, a stand-alone algorithmic analysis of that data does not necessarily require a CLIA-certified lab and should not automatically be treated as a clinical diagnostic laboratory test.
The 10 proposed lab-analysis SaMS codes include oncology algorithm analyses such as 0510U, 0511U, 0512U, 0513U, 0208U, 0414U, 0418U, 0220U, 0376U, and comparator exome code 81416. Proposed New Technology APC levels range from APC 1506 ($401–$500) to APC 1575 ($10,001–$15,000), depending on the code.
CMS' policy concern is direct: CLFS pricing for proprietary algorithm components lacks transparency, generally avoids beneficiary cost-sharing, and does not operate under OPPS budget neutrality. Moving these analyses to OPPS gives CMS more control over valuation and program integrity.
The comment deadline is August 31, 2026. Comments should reference CMS-1850-P and the regulations.gov docket CMS-2026-2344.
SaMS is the payment category RCM teams need to learn now. CMS is creating a distinct OPPS identity for medical software services, preserving payment for key codes like 75577, and moving some lab algorithms into OPPS. The final rule will decide whether this becomes a clean reimbursement lane or another complicated status-indicator maze.
This proposed rule is CMS acknowledging that AI diagnostic reimbursement cannot be solved by pretending software behaves like a traditional procedure, a lab test, or a device supply.
For vendors, SaMS creates a clearer payment conversation. For hospitals, it creates a new code inventory and claims-monitoring problem. For RCM teams, it creates an August 31 deadline to make sure the final framework reflects how these services are actually acquired, ordered, documented, billed, and denied.
That is the practical significance: the AI reimbursement category now has a CMS name, a proposed OPPS status indicator, and real HCPCS code lists attached to it.
Policy changes, payor moves, coding updates — delivered before 8 AM. Free.