CMS Algorithm-Only Test Rule Spurs Alarm Among Clinical Labs

CMS is moving to reclassify algorithm-only laboratory-developed tests (LDTs) that do not require a physical sample as medical devices, potentially stripping them of traditional lab billing pathways. This change means tests that use existing patient data to generate a result would require a separate FDA pathway and could be excluded from standard Medicare Part B coverage. Labs offering predictive risk scores, some digital pathology tools, and AI-driven diagnostic software are directly impacted. Billing departments must identify any LDTs in their offering that fit this description and prepare for a potential coding and reimbursement shift when the rule finalizes. Review contracts and test menus now to assess exposure.