On Nov 9, 2026, CMS published the final rule for the CY 2027 Medicare Physician Fee Schedule (CMS-1848-F).[1][2] Most coverage will be about E/M and MIPS. We want to talk about two lines that matter to anyone who signs radiology reports and to anyone buying or building software for them.
The first is a new name. The second is a number.
What CMS finalized on software
CMS changed its terminology from "Software as a Service" (SaaS) to "Software as a Medical Service" (SaMS). The final rule defines SaMS as "software-based technologies that support clinical decision making through algorithmic analysis, including those that provide clinical or diagnostic functionality."[1]
CMS gave its reason in the text. The old term was also used for general cloud computing outside health care, which caused confusion. The new term separates clinical algorithms from generic cloud tooling.[1]
Commenters pushed back that the definition is too broad. Some wanted it limited to stand-alone software that analyzes previously generated diagnostic information. Others asked how it relates to FDA's Software as a Medical Device and to CPT's AI terminology. CMS kept the definition and said it will consider the comments as it refines it.[1]
CMS also treats imaging and laboratory algorithms consistently. The rule says that whether software performs an algorithmic analysis of an imaging test, such as a CT scan, or of laboratory data, "all algorithmic analyses should be treated consistently from a payment perspective."[1]
A law firm summary of the companion hospital outpatient rule adds details we have not verified against that rule directly.[3] It reports that SaMS is assigned to New Technology APCs on an interim basis at rates that closely match CY 2026, that a new status indicator, O1, pays SaMS separately without multiple procedure discounting, and that FDA marketing authorization is required for non-laboratory SaMS to receive Medicare payment. It also reports that CMS called this an interim first step and said that SaMS designation does not itself establish coverage. Treat those points as a secondary reading until you have checked the OPPS final rule.
What CMS finalized on the conversion factor
The same rule projects the 2027 nonqualifying APM conversion factor to fall by $0.77 (2.31 percent) from the current $33.4009. The qualifying APM conversion factor falls by $0.62 (1.83 percent) from $33.5675.[1] Those are the factors that convert relative value units into dollars for physician services, including the professional component of the studies we read.
We are not saying the two changes are linked. CMS did not say that, and we do not think the rule says it. The conversion factor moves under a statutory formula. We are saying that both sit in one document, and a radiology group reading it will see a software category with a name and a payment path next to a lower rate for its own work.
What we do not know
We have not read every table in the rule. We have not checked the specialty impact table for diagnostic radiology, so we are not going to estimate what the net effect is for a given group. We have not verified which specific radiology AI products have codes that fall under SaMS, and we are not going to guess.
Our view of where this points is a hunch. It comes from reading how the rule is built, not from a payment model.
The distinction we think groups should draw
Under this framework, the software that gets paid is software whose output is a separately identifiable analysis. Think of a measurement, a score, or a quantitative comparison that exists as its own service and can carry its own code.
A lot of the AI that radiologists use every day is not that. It reorders a worklist, flags a study, or produces a draft that we review and sign. The benefit is real, but it appears in our turnaround time and our workload, not on a claim. We build one of these tools. Portal, ApertureAI's workflow, routes AI-generated draft reports to PACS so a radiologist can review and sign them. We want to be plain about this: if you read the definition above, a workflow tool like ours may well sit outside it, and we have not assessed that. We bring it up because it is our own bias in this discussion.
That matters for how a group evaluates software. A tool with a payment path can be evaluated like a service line: volume, expected reimbursement, coverage, documentation. A tool that only changes how we work has to be evaluated on hours, error rates, and whether it lets a group absorb volume without adding a reader. Those are different business cases. Vendor pitches often blur them, and a fee schedule that defines one category clearly makes the blur easier to spot.
Questions we would ask before buying anything this year
- Does the tool's output have its own code, or would it need one?
- If it does, has CMS designated it as SaMS or is the vendor asking you to assume it will be?
- If it has no payment path, what is the measured effect on turnaround time and on discrepancy rates in a site like ours?
- Who bears the cost when coverage is denied for an analysis that was performed?
None of these questions require believing a forecast. They require reading the rule and asking the vendor for the code.
Where to read the primary text
The final rule is on the Federal Register public inspection site and the CMS-1848-F page lists the rule's supporting files, including specialty impact and addenda tables.[1][2] The SaMS discussion is in the terminology section of the PFS final rule, and the OPPS final rule carries the payment details.
Which of the AI tools in your reading room would have a payment code of its own under this definition, and which would not? We would like to hear how your group is sorting them.
References
- Centers for Medicare & Medicaid Services. Medicare and Medicaid Programs; CY 2027 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies (CMS-1848-F), final rule, Federal Register public inspection text. https://www.federalregister.gov/public-inspection/raw_text/202/622/743.txt
- CMS. CMS-1848-F page (display date Nov 4, 2026; publication date Nov 9, 2026). https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices/cms-1848-f
- Halstead NB, Klimkiewicz A. CMS Finalizes Interim Payment Policy for Software as a Medical Service in Hospital Outpatient, Physician Fee Schedule Rules. Reed Smith, Nov 6, 2026 (secondary source, used only for OPPS details). https://www.reedsmith.com/our-insights/blogs/health-industry-washington-watch/102o8ks/cms-finalizes-interim-payment-policy-for-software-as-a-medical-service-in-hospita/