SaMS Final Rule: 14 Lab Algorithm Codes Leave the CLFS
Short answer: CMS's CY2027 final rules move 14 algorithm-only laboratory codes, including exome and genome re-evaluation codes 81417 and 81427, off the Clinical Laboratory Fee Schedule. They will be paid under OPPS new technology APCs and national physician fee schedule pricing starting January 2027, with standard coinsurance and no 14-day date-of-service rule.
In September we covered the proposal to pull lab algorithms off the CLFS. The final rules arrived in early November, and they are not a rubber stamp. The list of affected codes grew, a few codes were rescued, and several billing consequences are now concrete. This article is decision support for lab directors, billing leaders and compliance teams, not coding advice for a specific claim.
What CMS finalized
CMS finalized the Physician Fee Schedule (CMS-1848-F) and the Hospital Outpatient Prospective Payment System rule (CMS-1850-FC) in the first week of November 2026. CMS dated its PFS fact sheet November 4, 2026, and says its provisions take effect on or after January 1, 2027 unless noted. The CMS fact sheet itself does not discuss the algorithm-only codes. The detail below comes from a code-level analysis of the rule text by Discoveries in Health Policy, so verify specific codes and payment amounts against the Federal Register versions before you build a forecast on them.
According to that analysis, 14 algorithm-only codes leave the CLFS. CMS's stated rationale is that a stand-alone algorithmic analysis "is not a clinical diagnostic laboratory test," even if it was previously coded and paid like one. The codes are paid as other diagnostic tests: under OPPS through new technology APCs, and under the PFS through national pricing with procedure status indicator A. CMS rejected pricing by individual Medicare Administrative Contractors.
What changed between proposal and final rule
Four changes matter most. First, the list grew from 10 codes to 14. Codes 81417 and 81427, the re-evaluation of previously obtained exome and genome sequences, were added. For genetic testing labs that is the headline, because those two codes sit squarely in germline and rare-disease workflows.
Second, CMS accepted that two codes include wet-laboratory work. Codes 0511U and 81416 stay on the CLFS. Deleted code 0208U was also dropped from the list. Third, CMS held its ground on 0414U and 0220U after objections that they contain wet-lab components. Fourth, codes 1063T and 1064T moved from proposed APC 1542, which paid $350.50, to APC 1509, which pays $750.50.
The lesson is that CMS engaged with code-level technical arguments. Where a lab could document wet-bench work inside a code descriptor, CMS listened in at least two cases. Where the argument was general opposition, the policy went forward.
The payment amounts
Under the OPPS final rule, as summarized, 0510U maps to APC 1506 at $450.50. Twelve codes, including 0512U, 0513U, 0414U, 0418U, 0220U, 0376U and several Category III codes, map to APC 1509 at $750.50. Code 81417 maps to APC 1505 at $350.50, and 81427 maps to APC 1522 at $2,250.50. These are standard payments, and the fixed APC bands mean the new amounts approximate, rather than match, the prior CLFS rates, which were the starting point for the assignments.
On the PFS side, CMS derived practice expense RVUs from the OPPS payment amounts, so actual dollars will vary by geography and by the conversion factor. The CY2027 conversion factor itself falls: CMS lists $32.95 for qualifying APM participants, down 1.83 percent, and $32.63 for non-qualifying participants, down 2.31 percent.
Billing consequences labs should plan for
Several operational effects follow from the move, and they matter more than the headline rate.
Cost-sharing changes. The CLFS generally carries no beneficiary copayment. OPPS and PFS services follow standard coinsurance rules, so patient responsibility appears where it did not before. Labs that do not collect patient balances will need a plan for that.
The 14-day rule no longer applies to these codes. The analysis states that the CLFS date-of-service provision at 42 CFR 414.510 does not govern them, which it describes as affecting a longstanding issue in billing molecular testing after hospital encounters. Our explainer on the Medicare 14-day rule covers the baseline you are leaving.
CLIA and FDA positions are unchanged on paper. The payment change does not revise CLIA requirements. The analysis also notes that FDA marketing authorization is not currently required for this laboratory-derived category, in contrast to general SaMS software, where Medicare payment requires FDA authorization.
Packaging risk is deferred, not removed. For 2027, new technology APC services are protected from comprehensive APC packaging, but long-term treatment is uncertain. CMS calls 2027 an interim policy and says it will consider more input for possible CY2028 proposals.
What did not change for the rest of the CLFS
For codes that stay on the CLFS, the CMS fact sheet confirms that reductions are limited to 15 percent per year through CY2029, and that the most recent reporting period for non-ADLT tests ran from May 1 to July 31, 2026, using data collected January 1 to June 30, 2025. CMS also gathered input on duplicate testing and siloed lab results but finalized no policy, saying comments may inform future rulemaking. Our look at the preliminary 2027 CLFS rates for molecular pathology shows what the cap means in practice.
A readiness checklist before January 1
These steps are general operational suggestions, not payer requirements.
Map your code list. Identify every code you bill that appears among the 14, and separate out 0511U and 81416, which remain on the CLFS.
Decide who bills. Under OPPS the hospital outpatient setting matters, so confirm with hospital partners how these services will flow and who owns the claim.
Model coinsurance. Estimate patient balances per code and decide on collection and financial-assistance workflows.
Update edits. Remove 14-day-rule logic from affected codes only, and keep it for codes that stay on the CLFS. Also review your 2027 molecular code set checklist.
Watch for denials. New pricing methods often produce front-end edit surprises; track them using the approach in our guide to genetic testing denials, and keep Medicare coverage requirements in view.
Frequently asked questions
Which genetic testing codes were added in the final rule?
According to a code-level analysis of the final rules, CMS added 81417 and 81427, the re-evaluation of previously obtained exome and genome sequences, bringing the total to 14 codes. Labs billing these codes should verify the list against the Federal Register text before January 2027.
When do the changes take effect?
CMS states that provisions in the CY2027 physician fee schedule final rule take effect on or after January 1, 2027, unless noted. The algorithm-only code payment change is reported as effective January 2027. CMS describes the approach as interim and may revisit it in CY2028 rulemaking.
Will patients owe coinsurance on these tests?
Under the finalized approach, these services move from the CLFS, which generally has no copayment, to OPPS and PFS rules with standard coinsurance. Actual patient liability depends on the benefit design and setting, so labs should model balances by code and payer type.
Does the 14-day rule still apply?
For the 14 reclassified codes, the analysis says the CLFS date-of-service rule at 42 CFR 414.510 no longer applies because they leave the CLFS. For codes that remain on the CLFS, such as 0511U and 81416, the existing rule should continue to govern.
Did CMS change CLIA requirements?
No. The reported summary says the payment change does not revise CLIA requirements. It also notes that FDA authorization is not currently required for the laboratory-derived category. CMS's separate theory is that an algorithm-only analysis is not a clinical diagnostic laboratory test for payment purposes.
For workflow tooling that helps labs track code-level payment rules, see the ScreenMyGene homepage.
Educational disclaimer: This article is for general educational and informational purposes only. It is not legal, coding, billing, compliance or medical advice, and it does not guarantee coverage or payment. Rules and payment amounts change; confirm requirements against the Federal Register and consult qualified counsel or certified coders for specific claims.
Sources: CMS, "Calendar Year (CY) 2027 Medicare Physician Fee Schedule Final Rule" fact sheet (Nov 4, 2026); CMS press release on the CY2027 PFS final rule (Nov 4, 2026); AHA News, "CMS issues CY 2027 physician fee schedule final rule" (Nov 4, 2026); Discoveries in Health Policy, "CMS Pulls Algorithmic Lab Services Off the CLFS" (Nov 2026), summarizing CMS-1850-FC and CMS-1848-F.