Saturday, October 24, 2026

The Distribution of US Payer Price PAMA Data Is Bizarre

Here's an analysis run mostly by AI, based on my ability to "vibe code" instructions of what AI had to do with raw PAMA Excel data.

Data shows the bar charts of the private payer price distribution for about 15 codes.  The distributions are strange and not many are "Guassian" or "normal."  While some are tightly distributed and others spread evenly around the price range.   

See a prior study in 81455, 81456 here.  See a prior study of CPT neuro code data here.

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I went to the giant raw data files for PAMA price reporting and created smaller spreadsheets for PLA code data and for 815nn (MAAA code) data.  I asked Chat GPT to consider only codes with more than 200 rows of data.  

This gave 4 just charts for PLA data (of 500 PLA codes in PAMA) and 11 charts for 815nn data.  

  • Note that CMS does not usually provide sole-source lab data, so I'm not sure why there seem to be data for 81528 Cologuard but not others (e.g. Oncotype Dx Breast 81519, Veracyte AFIRMA 81546, etc).  With distributed kits like Biofire you'd expect to see data from many TINS, though, and CMS posts the data.

Data jumps from 81539 to 81596:




Data jumps from 81517 to 81528:


Anyway, so far, we've identified codes in the PLA series or 815/MAAA series with > 200 rows of PAMA data.

Then I instructed Chat GPT to take the price data for each code that qualified, and bin the price data in 8 bins (equal size, but I let AI figure it out) as vertical bar charts per price bin.

See all the results in ZIP file.   

0359U IsoPSA

0503U Precivity

0077U MASS FIX

0202U BioFire Respiratory 2.1


81513 Aptima Vaginosis

81514 BD Max Vaginal

81515 Expert Xpress MVP

81596 HCV FibroSure


Cologuard Original 81528



81517 Enhanced Liver Fibrosis ELF


Maternal Serum Quad Screen


81500 ROMA

81507 Harmony Prenatal


81503 Ova One









CMS New Voluntary Exclusion Authority: What Court Cases Have Said

This month, RFK Jr gave CMS itself the elective exclusion authority long reserved only for referral to the OIG's attorneys. Blog.

Here I've asked Claude to put on its virtual law school professor hat and discuss how case law may have shaped the interpretation of the statute.   (The statute allows years of exclusion for violations as loosely defined as "unnecessary services" or "overcharging."  The exclusion arrives in days, but fighting it might mean years in court.)

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AI CORNER

Essay by CLAUDE.

See shorter essay by Chat GPT  here.

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See the cloud 8p PDF here.


Two Hands on One Lever:

CMS, Permissive Exclusion, and Forty Years of Case Law

CLAUDE OPUS Oct 24, 2026 · @Bruce Quinn  AI Writing - Not Legal Advice

On October 14, 2026, Secretary Kennedy published a one-page Statement of Delegation of Authority that may turn out to be the most consequential program-integrity document of the year. It hands the CMS Administrator the Secretary's permissive exclusion powers under section 1128(b) of the Social Security Act, 42 U.S.C. § 1320a-7(b). The Office of Inspector General keeps everything it had. The delegation withholds two things, the authority to conduct hearings and the authority to issue regulations, and it ratifies any exclusion-related action CMS took before the notice appeared. CMS may redelegate within the agency.

Nothing in the statute changed. What changed is who may pull the lever, and that turns out to matter a great deal, because section 1128 has spent four decades being interpreted on the assumption that the entity pulling it was a law-enforcement office rather than the payer. The question for law professors is what the accumulated case law has to say to a new actor; the question for policy people is whether that case law will discipline CMS the way it has disciplined OIG, or whether a payer with its own data warehouse and its own grievances will find the doctrinal fences less constraining than they look.

The statute CMS inherits as of October 2026

Exclusion predates OIG's custody of it. The 1977 Medicare-Medicaid Anti-Fraud and Abuse Amendments gave the Secretary authority to bar providers convicted of program-related crimes, and the Medicare and Medicaid Patient and Program Protection Act of 1987 reorganized the authority into the structure we still use: section 1128(a) mandates exclusion for a short list of convictions (program-related crimes, patient abuse, and later felony fraud and felony controlled-substance offenses), while section 1128(b) permits exclusion on a longer and more heterogeneous list (17 instances, some with detailed rules.) The Secretary delegated both to OIG in the 1980s, and OIG has run the machinery, and written the regulations at 42 C.F.R. Part 1001, ever since. The Affordable Care Act added grounds in 2010, including section 1128(b)(16) for false statements on enrollment applications, a provision that sits squarely in CMS's own territory.

The permissive grounds are worth reading as a list, because their diversity is the point. Some require a conviction: misdemeanor fraud, obstruction of an investigation, misdemeanor controlled-substance offenses. Some require no conviction at all: loss of a state license, exclusion from another federal program, furnishing unnecessary or substandard services, charging substantially in excess of usual charges, engaging in kickback or false-claims conduct found administratively, being an owner or officer of an excluded entity, defaulting on health-education loans. "Permissive" describes the Secretary's discretion once a ground is established; it says nothing about how much process preceded the finding. A conviction-based permissive exclusion rides on a judgment entered by a court. A section 1128(b)(6) exclusion for unnecessary services rides on a medical-review file assembled by the agency, which, as of this month, may be the same agency that decides whether to exclude.

The consequences are also worth stating plainly for the non-lawyers. Exclusion is not revocation. Revocation under 42 C.F.R. § 424.535 removes a supplier's Medicare billing privileges and is appealed through the enrollment track. Exclusion bars payment by every federal health care program for any item or service furnished, ordered, or prescribed by the excluded person; it lands the name on the public LEIE; it exposes any employer who bills for the excluded person's work to civil monetary penalties; and it is appealed through an ALJ and the Departmental Appeals Board under 42 C.F.R. Part 1005, with judicial review after that. CMS has for years run a smaller version of this, the Medicare Advantage and Part D preclusion list and a seldom-used set of Part 402 exclusion grounds, but those were the minor leagues. Section 1128(b) is the real thing.

Exclusion is remedial, which is why the courts let it be harsh

The foundational line of cases established that exclusion is not punishment, and nearly every later doctrine depends on that characterization.

The problem arose because excluded providers were often also prosecuted, and after United States v. Halper (1989) it was briefly fashionable to argue that a civil sanction imposed on top of a criminal conviction was a second punishment. Dr. Manocchio, a physician who pleaded guilty to filing a false Medicare claim and then received the mandatory five-year exclusion, made exactly that argument. The Eleventh Circuit rejected it in Manocchio v. Kusserow, 961 F.2d 1539 (11th Cir. 1992), holding that exclusion serves to protect the programs and their beneficiaries from untrustworthy providers rather than to punish, and so raises no double-jeopardy problem. The Ninth Circuit reached the same conclusion from the ex post facto direction in Travers v. Shalala, 20 F.3d 993 (9th Cir. 1994), where a physician's offense predated the 1987 amendments that created the five-year mandatory minimum; because the sanction was remedial, applying the longer term to earlier conduct was permissible.

The remedial label did enormous work. It is why exclusion need not be proportioned to culpability in the way a sentence must be, why it can follow a conviction without constitutional objection, and why the government may act before a full hearing. For CMS, the label is a gift and a warning. It is a gift because an agency that excludes to protect beneficiaries need not prove much about the provider's state of mind. It is a warning because the remedial rationale has to be true in the individual case. Hanlester, discussed below, is what happens when a court decides it is not.

No hearing first, usually

A second early cluster of cases settled that due process does not generally require a hearing before exclusion takes effect, provided the provider has notice, a chance to respond in writing, and a prompt hearing afterward.

Ritter v. Cohen, 797 F.2d 119 (3d Cir. 1986), involved a Pennsylvania physician suspended from Medicare on findings that he had furnished excessive and unnecessary services. He argued that his livelihood could not be taken without a prior evidentiary hearing. Applying Mathews v. Eldridge, the Third Circuit held that written notice, an opportunity to submit evidence and argument, and a post-suspension hearing were enough, given the government's interest in stopping harm to patients and the program. Two years later the Eighth Circuit faced the same argument from Dr. Ruben Thorbus, a rural Minnesota physician whose clinic drew roughly sixty percent of its patients from Medicare and Medicaid and whom federal medical reviewers accused of performing excessive diagnostic endoscopies and delivering substandard care. HHS imposed a five-year exclusion after he had an opportunity to respond, and he sought a preliminary injunction to keep practicing while his administrative appeal proceeded. Thorbus v. Bowen, 848 F.2d 901 (8th Cir. 1988), affirmed the denial. The court found no likely due-process violation and, in the balance of harms, put the risk to patients ahead of the physician's financial and reputational loss, even in a community where he was one of few available doctors.

Congress later carved out one important exception. Exclusions under section 1128(b)(7), the ground for kickback and false-claims conduct found administratively rather than by a court, do not take effect until after a hearing, unless the Secretary determines that the provider's continued participation poses a risk to health or safety. The distinction is sensible: a conviction or license revocation has already been adjudicated somewhere, whereas a (b)(7) exclusion asks the agency to prove the underlying violation itself. CMS now holds (b)(7) authority, and if it is tempted to lean on the health-or-safety override to skip the pre-exclusion hearing, the Thorbus and Ritter line will be read against it: those courts tolerated speed because the statute and regulations supplied prompt review afterward, not because the agency's say-so about danger was self-validating.

"Related to" is capacious, but the length must be explained

The most important modern appellate decision on permissive exclusion is Friedman v. Sebelius, 686 F.3d 813 (D.C. Cir. 2012), and it cuts both ways.

The facts are familiar to anyone who followed the opioid litigation. Purdue Frederick had marketed OxyContin with claims that it was less addictive and less prone to abuse than competing opioids. In 2007 the company pleaded guilty to felony misbranding, and three senior executives, the chief executive, the general counsel, and the chief medical officer, pleaded guilty to misdemeanor misbranding under the responsible corporate officer doctrine. That doctrine, which dates to Dotterweich and Park, imposes liability on an officer who had authority to prevent or correct the violation, without proof that he knew about it. OIG then excluded all three for twelve years under section 1128(b)(1), which reaches misdemeanor convictions "relating to" fraud in connection with the delivery of a health care item or service.

The D.C. Circuit answered two questions. First, was a strict-liability misdemeanor "related to" fraud? Yes. The court read the phrase broadly: the conduct underlying the conviction was fraudulent misbranding, and the executives' pleas admitted a relationship to it, even though their own offense required no fraudulent intent. That holding gives the government a long reach; it means an executive can be excluded for a crime that required nothing more than being in charge. Second, was twelve years lawful? Not as explained. OIG had never before imposed anything close to that length on individuals in comparable circumstances, and the agency's decision did not grapple with its own prior practice. Under ordinary administrative-law principles, an agency may change course, but it must acknowledge that it is doing so and say why. The court vacated the twelve-year term and remanded; the executives ultimately received substantially shorter exclusions.

For CMS, Friedman is the case to tape to the wall. The agency arrives with a mandate, voiced by the Secretary in July and in the delegation notice itself, to remove bad actors more aggressively than OIG has. Nothing in section 1128 forbids that. But the baseline against which any CMS exclusion will be measured for arbitrariness is OIG's forty-year corpus of decisions, aggravating and mitigating factors at 42 C.F.R. §§ 1001.102 and 1001.201, and the Board's settled rule that an ALJ reviews the length of a permissive exclusion for reasonableness rather than substituting his own judgment. Because the delegation withholds rulemaking, CMS cannot write itself a new set of factors; it must apply OIG's, and it must explain any departure from how OIG has applied them. A payer that wants to signal toughness by handing out fifteen-year exclusions for conduct OIG historically treated with five will be writing briefs for the D.C. Circuit.

When exclusion stops being remedial: the laboratory case

Hanlester Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995), is the decision diagnostics people already know, usually for its (since-overruled) holding on anti-kickback intent. Its exclusion holding deserves more attention than it gets.

Hanlester Network organized three clinical laboratory joint ventures in California, selling limited-partnership interests to physicians who were, not coincidentally, in a position to refer specimens. SmithKline BioScience Laboratories managed the labs and performed most of the testing under contract. A Hanlester marketing agent told physician investors, in substance, that their returns would track their referrals. The Inspector General found anti-kickback violations and sought permissive exclusions under section 1128(b)(7) against the network, the three joint-venture laboratories, and several individuals.

The Ninth Circuit affirmed that the entities had violated the statute, through the agent's conduct, on a theory of vicarious liability. It then reversed the exclusions. The court's reasoning was the remedial rationale turned around and pointed at the government: exclusion exists to protect the programs from providers who are likely to cause future harm, the entities' culpability was derivative of an agent who had long since departed, and there was no evidence on the record that they remained untrustworthy. A violation had occurred; exclusion was still unwarranted.

Two cautions. The intent holding in Hanlester, which required proof that the defendant knew the conduct was unlawful and specifically intended to violate the statute, was legislatively displaced in 2010 when the ACA added section 1128B(h). And Hanlester does not stand for the proposition that firing the salesman cures the company; its outcome depended on a thin record of ongoing risk. But the structural point survives: the statutory ground and the remedial justification are separate inquiries, and a court will police the second. For CMS, which will often be acting on data showing that a laboratory or a physician billed aberrantly in 2024, the question a reviewing tribunal will ask is whether that history establishes untrustworthiness now.

The grounds CMS is best positioned to use, and least tested in using

The delegation notice says CMS is "uniquely positioned to investigate, identify, and develop the evidentiary basis" for permissive exclusions. That is true, and it is also the problem. The grounds where CMS's data advantage is greatest are precisely the ones with the thinnest case law.

Section 1128(b)(6)(B), unnecessary or substandard services, is the Thorbus ground, and Thorbus is a preliminary-injunction decision about interim relief, not a merits ruling about how many unnecessary endoscopies make a pattern. Section 1128(b)(6)(A), charges substantially in excess of usual charges, has never been defined; OIG proposed a rule in 2003 and withdrew it in 2007 after concluding it could not draft a workable definition, and the ground has lain largely dormant since. A payer that sets its own fee schedule and then excludes a laboratory for charging "substantially in excess" of its usual charges would be testing a provision that has no appellate gloss at all. Section 1128(b)(16), false statements in enrollment, is new enough that the Board's decisions are sparse, and CMS already revokes enrollment on the same facts under section 424.535(a)(4); the delegation lets it convert an enrollment dispute into a program-wide bar with a different appeal track and far heavier collateral consequences. Section 1128(b)(15), reaching owners and officers of excluded entities, invites exactly the kind of derivative-liability exclusion that Hanlester reversed.

None of this means CMS lacks authority. It means CMS will be making law in areas where OIG, for whatever mix of prudence and caseload, chose not to.

What the cases, read together, tell a new enforcer

Three threads run through the decisions. The statutory ground must be established as written, and the courts have read "related to" generously but have not read it to swallow the enumerated list. The decision to exclude, and the length of exclusion, must be justified on the record as protective rather than punitive, and must be consistent with the agency's own prior practice or explain the inconsistency. And the timing of review is fixed by the statute: ordinarily after the fact, with the (b)(7) pre-exclusion hearing as the exception, and with district courts disinclined to enjoin exclusions in the interim.

The institutional novelty is that these constraints were developed with OIG as the respondent, an office whose culture is prosecutorial and whose exclusion docket has been dominated by convictions and license losses, grounds where someone else did the fact-finding. CMS is a payer. Its instinct is to act on claims data, its grievance is overpayment, and its new authority is unaccompanied by new regulations, new hearing procedures, or any public statement about how it will coordinate with OIG, honor OIG's exclusion waivers in False Claims Act settlements, or treat entities already operating under corporate integrity agreements. The delegation notice resolves none of this and, in withholding rulemaking and hearings, suggests the Secretary did not intend it to.

The case law will not stop CMS from excluding anyone. It will insist that CMS do what OIG has had to do: name the ground, prove it, explain the term, and be prepared to defend the exclusion as something other than a sanction for having annoyed the payer. Friedman and Hanlester were both decided against an agency that had been doing this for decades. The first several CMS exclusions to reach the Board, and the first to reach a circuit, will tell us whether the statute's accumulated discipline transfers with the delegation or whether, as the Secretary's July remarks implied, the point of a second hand on the lever was to pull it harder.

Sources

 


Dr. Oz Videos: (#1) Hates Lab Industry, (#2) Deep Dive on Fraud, Documentary

HEADER

Dr. Oz’s recent and biting criticism of laboratory pricing and CMS’s unusual fraud documentary reveal an increasingly aggressive agency. 

This review examines the alleged schemes, enforcement strategy, and implications for CRUSH and exclusion authority—with one welcome observation for laboratories: the October 21 documentary and press conference did not single them out.

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Something Old

Recall that in late August, RFK Jr recorded a 3 minute video tearing apart AMA (both AMA CPT and AMA RUC), and urging  the public to comment to CMS (in an RFI) that they're mad as hell and not going to take it any longer.   Here, here.

Something New

If you're around the lab industry (or the fraud industry), here are two Dr. Oz videos you need to track.  One is only on Linked Iin and Facebook, the other is on Youtube [ cms.hhs.gov].

Dr. Oz Slams Lab Industry

Dr. Oz used the occasion of the PAMA data release (9/21/26) to slam the whole clinical laboratory industry for overcharging CMS billions of dollars, meaning, the delta between this year's CLFS fee schedule and the new one established by a new PAMA survey, effective January 2027.

Linked In Video.    or   Facebook video.   

The transcript opens: “You been getting ripped off? Let me explain.”

Dr Oz then argues that:

- Medicare has paid excessive lab rates for years, with its rate-update process used only once since Congress established it in 2014.

- Medicare pays approximately 16% more than private insurers for the same tests.

- Updated rates expected in 2027, with reductions capped at 15% annually per test, would eventually eliminate more than $1 billion in annual waste.

- Publishing the data could also help Medicaid and ACA plans reduce their payments.

"Medicare paying 16% than insurers for the exact same thing"

Dr. Oz - Mini Documentary on Fraud Strategies

There was a 30 minute fraud press conference on October 14, 2026 here.

There was also a 45 minute fraud press conference on October 21, 2026 here.

They released a detailed, 30 minute "Fraud Mini Doc" on October 21, 2026 here.


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AI Corner
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These three presentations describe a CMS campaign to make fraud prevention central to health program administration. 

The documentary is its most revealing expression: an unusually personal, dramatic account featuring Dr. Oz, field confrontations, organized crime allegations, vulnerable patients, and Kim Brandt’s operational explanations. Its central argument is that government must stop money leaving, rather than pursue it afterward. October 14 (press conf) emphasizes duplicate insurance subsidies; October 21 (press conf + docu) demonstrates more aggressive provider and state oversight. Together, they suggest that CRUSH and CMS’s newly delegated exclusion authority belong to a broader effort to change enrollment, payment, enforcement, and public expectations about federal stewardship.

The two press conferences, briefly. October 14 is an RFK-led announcement, with substantial participation by Oz and program officials, about eliminating improper insurance subsidies and duplicate coverage. Its useful qualification comes from Oz: “This is not today overt fraud. This is sloppiness”—distinguishing the principal announcement from a separate phantom-enrollment investigation.  

October 21 is more operational and confrontational. Kennedy is absent; Oz leads, supported by Inspector General March Bell, Kim Brandt, and Medicaid Director Dan Brillman. 

The subjects are New York adult daycare, California personal-care spending, exclusions, audits, and state accountability. Both events frame enforcement as protecting the safety net; October 21 demonstrates how aggressively CMS intends to intervene.  

Why the documentary is remarkable.

The approximately 28-minute film combines an enforcement documentary, an Oz leadership portrait, and an argument for institutional change. Its opening question—“Why does evil happen?”—immediately establishes a moral register far removed from an ordinary CMS explanation of improper-payment controls.

Oz supplies the personal narrative and confrontational presence; Brandt supplies much of the operational explanation. Recruitment stories, field encounters, arrest sequences, music, luxury purchases, and accounts of patient harm make fraud tangible. The repeated theme is “stolen trust”: fraud threatens not only budgets but public willingness to support collective programs.

My reading is that the film also seeks public support for disruptive enforcement. Near the end, Oz explicitly asks viewers to support “difficult decisions.” That matters when the decisions involve freezing payments to states, restricting enrollment, or questioning entire programs. 

The following account describes the film’s allegations and explanations; the transcript itself does not independently establish every case or numerical claim.  

The principal schemes and vulnerabilities include:

  1. Easy entry into Medicare billing—the “golden ticket” problem.
    Brandt recounts enrolling her dog, Sherlock, as a DME supplier using her address and bank account. The anecdote’s intended lesson is that inadequate entry screening can grant billing access before the government establishes who is really operating the business. It is an assertion in the film, not a documented enrollment audit presented to viewers. (Approximately 9:21–10:33.)

  2. DME “bust-outs” using stolen beneficiary identities.
    Operators obtain Medicare numbers, bill for expensive equipment never delivered, collect payments, and move the money before beneficiaries recognize the claims. Nominal owners obscure the actual controllers, while overseas financial transfers frustrate recovery. The film identifies the delay between payment and beneficiary detection as a central vulnerability. (14:57–16:14.)

  3. Adult daycare as an entry point for multiple billing schemes.
    Seniors are recruited into centers, and their identities support claims across associated medical, pharmacy, and equipment businesses. Closing one storefront leaves the controlling network intact. October 21 adds specificity: alleged cash inducements approaching $1,000, attendance sheets completed for future days, and social daycare billed as medical adult healthcare. (Documentary, approximately 14:05–14:57; press conference, 17:15–28:25.)

  4. Hospice claims involving nonexistent or ineligible patients.
    The film describes “ghost patients” and people falsely represented as terminally ill. Low mortality and unusual geographic concentrations become investigative signals. A separate Carson sequence describes allegedly trafficked seniors, deceptive hospice enrollment, poor living conditions, and deficient care. The argument is that fraudulent billing can directly endanger patients. (16:14–18:51.)

  5. Operators moving between businesses and benefit categories.
    Fraudsters allegedly migrate from DME to hospice or home health, or reopen through replacement entities. Brandt uses this to justify enrollment moratoria and action against the people behind businesses. The problem is recurring access to public payment, beyond any single false claim. (20:08–21:12.)

  6. Skin substitutes and payment incentives that attract abuse.
    Oz describes extraordinary spending growth, very expensive products, and lavish purchases financed by billing. He presents payment reductions as a way to remove the financial attraction. This is the film’s most consequential policy example: changing reimbursement becomes an anti-fraud intervention, alongside investigations and exclusions. The film attributes the spending reversal to pricing; October 21 also credits warning letters to unusually large billers, so the presentations do not establish that pricing alone produced the result. (21:34–22:50; October 21, approximately 38:41–39:04.)

The proposed operating model follows directly: stronger screening, claims analysis before payment, faster investigations, cross-agency coordination, and sanctions that prevent reentry. Brandt’s stated ambition is to identify and remove bad actors within their first three to six months, rather than after years of billing.

What the three events reveal together.

The most important development is CMS presenting itself as an active enforcement institution, with responsibility extending from enrollment through payment and exclusion. October 21 makes this concrete: nearly 100 monitoring letters, ten notices of intent to exclude, a reported first CMS exclusion letter, California funding deferrals, and a compliance warning to New York.

The campaign also reaches beyond individual providers to intermediaries and program design. Managed-care plans are criticized for inadequate oversight; states face demands to substantiate spending; payment arrangements themselves become targets. Oz’s question about whether Medicaid should fund seniors playing mahjong crosses from detecting false claims into debating what the program should purchase. The discussion of caregiver unionization similarly extends beyond conventional billing enforcement.

The analytical caution is that these materials place several different things under the fraud banner: criminal schemes, documentation failures, duplicate enrollment, unusually high spending, and disputed policy choices. Those distinctions still matter. A statistical outlier warrants investigation; it does not establish fraud. A funding deferral is not a final finding that the entire amount was stolen. And the film’s broad allegations about prior administrations are political assertions, not demonstrated historical findings within these transcripts.

What this suggests for CRUSH.

As of October 24, the official OMB record still lists CRUSH—CMS-6098, RIN 0938-AV97—as a proposed rule under review, received August 7, 2026. The regulatory agenda projects an October proposal, but lists no legal deadline. These presentations therefore signal direction and urgency; they do not disclose the unpublished rule’s actual provisions. reginfo.gov

My expectation is that the campaign will strengthen the administration’s commitment to provisions that make intervention earlier and harder to evade:

Documentary themeDirection to watch in CRUSH
Billing access is too easyStronger identity, ownership, and enrollment verification
Money disappears before recoveryFaster prepayment review and payment-suspension processes
Operators reopen or change programsBetter coordination of revocation, preclusion, and ownership information
States and plans miss suspicious activityStronger data, oversight, and accountability requirements

These expectations align with subjects already raised in the February CRUSH RFI. They are forecasts, not confirmed provisions. The RFI also explicitly addresses laboratory fraud, genetic and molecular testing, and the potential safeguards associated with MolDX registration. Laboratories are therefore within the regulatory discussion even though they are not a major documentary subject; these materials do not establish that nationwide MolDX requirements will appear in the proposal. federalregister.gov

Because CRUSH was already at OMB before these October events, I would interpret the film primarily as public justification and preparation for implementation, rather than evidence that the documentary generated the rule.

CMS exclusion authority is already part of the response.

The correct term is permissive exclusion. The October 14 delegation gives CMS the Secretary’s authority under Social Security Act §1128(b), while preserving OIG’s authority. It explicitly excludes authority to conduct hearings or issue regulations. Thus, CMS can make exclusion determinations under the delegation, but “conduct and finalize” should not imply control over the entire adjudicatory process or freedom from review. federalregister.gov

Three distinctions are especially relevant:

  • No criminal conviction is required for important grounds, including specified excessive charges, unnecessary or substandard services, and administratively established prohibited conduct.
  • “Overbilling” is shorthand, not the statutory test. Section 1128(b)(6)(A) concerns charges substantially above the provider’s usual charges, subject to qualifications; subsection (B) concerns services substantially exceeding patient needs or failing professional standards. High revenue or high utilization alone does not establish those grounds.
  • Notice, hearing, and judicial-review protections remain. For §1128(b)(7), the statute generally provides a hearing before exclusion takes effect, subject to a health-or-safety exception. ssa.gov

Most tellingly, Brandt reports at approximately 20:15–21:21 on October 21 that CMS has already used the new delegation. The transcript mentions both notices of intent and a first exclusion letter, so it should not be read as proof that all ten exclusions were already effective or finally adjudicated.

The practical implication is substantial: the agency that sees suspicious payment patterns can now pursue a broader exclusion remedy itself, alongside OIG. My expectation is a shorter path from analytical flag to investigation and, where the statutory grounds are established, exclusion. CRUSH could reinforce that path through stronger enrollment and payment controls. The key question for legitimate providers will be how reliably CMS distinguishes suspicious patterns from substantiated misconduct before imposing consequences that reach across federal healthcare programs.

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A Lab Industry View

Dr. Oz’s separate September 21 PAMA video opens with “You been getting ripped off? Let me explain.” He argues that Medicare pays approximately 16% more than private insurers for laboratory tests and that updated rates could eventually save more than $1 billion annually. To people working hard to deliver reliable laboratory services, that broad attack may feel unfair—or like political grandstanding over payments established by Medicare itself.

The good news: neither the October 21 fraud documentary nor its accompanying press conference specifically called out the laboratory industry. Their attention went primarily to durable medical equipment, hospice, adult daycare, personal care, and skin substitutes. Laboratories were not singled out in these prominent presentations of CMS’s enforcement campaign.

The focused takeaway is reassuring, within limits: Oz’s PAMA rhetoric was tough on laboratories, but that attack did not carry over into the October 21 fraud presentations. That does not remove laboratories from potential scrutiny under CRUSH, but their absence from this particular spotlight is welcome news.


Thursday, October 22, 2026

Speeding Up Digital Pathology: Great Lessons from Adoption of Da Vinci Robotic Surgery

 We often hear that adoption of digital pathology (since, for example, the $100M acquisition of Bioimagene by Roche almost twenty years ago)...is so slow due to microeconomics.

Let's look at another transformation.  Robotic surgery aka da Vinci blew into the markets like a tornado.  There were four possible drivers -

  1. Better clinical outcomes
  2. Better economics (faster-cheaper)
  3. Urologist preference and excitement 
  4. Hospital-to-hospital market competition
Especially early on, there was little evidence for #1 or #2.  That leaves factors #3 and #4.

What are the lessons for digital pathology?!

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Find the white paper report in the cloud... HERE.



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On a personal note, I dictated the prompt for this report in an Uber, and the 13-page report was ready a few minutes later when I got out.

Dictated.. Use a agentic research skills and write a detailed white paper style report about the adoption of da Vinci robotic surgery in the United States. I believe we can take for granted that prostate was the index application. Why? How much was adoption driven by clinical superiority or efficiency and speed versus either the surgeons interest in using the most advanced technology and enjoying it, like being an airplane pilot, or the competitive need for hospitals to install state-of-the-art robotic surgery to compete with other hospitals. I believe there is minimal economic or outcome data for the first years, but it option was rapid, so it was being driven by other factors, such as hospital hospital, competition or neurologic surgeons, wanting to be on a fascinating and exciting cutting edge of technology. After reviewing the data and summarizing your findings, compared to the adoption of digital pathology, which also has relatively little clinical outcome or economic data, but if it was done correctly, I have a hypothesis pathologists would love it.

Wednesday, October 21, 2026

Cologuard 2.0 - Pricing on Earnings Call - Screen Shots from CMS

On the October 21, 2026, Abbott earnings call, there were some remarks on the pricing of Cologuard 2.0 in 2027 and forward.

I'll  show the dialog, from Motley Fool transcript, and then some screen shots of the CMS pricing data and its sources.

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https://www.fool.com/earnings/call-transcripts/2026/10/21/abbott-abt-q3-2026-earnings-call-transcript/

....Our next question will come from Vijay Kumar from Evercore ISI. Your line is open.

  • Vijay Kumar: Hi, Robert. Good morning, and thank you for taking my question. I have 2 questions. Maybe I'll ask both of them upfront. One, a follow-up on this Exact. Did Cologuard 2.0, the next-gen Cologuard, did the reimbursement get cut, Robert? And what's the ASP for this blood test? It feels like Exact should accelerate. My second question was FY 2027. Thanks for the color on top line, but should we still be aiming for double-digit EPS growth? Thank you.
  • Robert Ford: Yeah, sure. Let's talk about your first question regarding Cologuard Plus and getting a reimbursement cut. Listen, Cologuard Plus is a new test, so the process for setting CMS reimbursement is a little bit different versus tests that have been on the market for a while. We've been in active discussions with CMS. Conversations have been very productive. 
  • I'll just say the following. I find it very hard to imagine that when the process is done, that the reimbursement rate for Cologuard Plus would go down, and I'm just going to leave it at that. It is an interesting process, very different, I would say, from NCDs and some of the MedTech kind of process.
  • So it's a little bit of a new process for us. But like I said, I'd be very surprised if that were to happen. [next topic]  I think you [also]  asked about the price of our blood test. Yeah, I'm not going to divulge that because for obvious competitive reasons. There's somewhat of a price that's been set by the market right now
###
Cologuard Plus (aka "2") is PLA code 0464U, dating from July 1, 2024.   It was FDA approved in October 2024.

In the summer of 2024, CMS initially proposed to crosswalk the 0464U price to that of older Cologuard 81528.  But public comment followed, and in the final rates of November 2024, effective January 2025, the Cologuard price was set at $592 by crosswalk of 81327 x 3 (plus 82274).  That's 81327 x 3 or $192 x 3.  

PAMA currently surveyed paid prices in 1H2025, as reported to CMS in June-July 2026.  0464U was one of the codes that had NO reported PAMA pricing.   You can see this on the master spreadsheet of PAMA results, because 0464U has its current price and no further data... no PAMA survey data.

click to enlarge

Since 0464U has no PAMA survey data to set the 2027 2028 2029 price, CMS had to crosswalk it or gapfill it.   Since it had previously been crosswalked at 3 x 81327, CMS repeats that.   You can see the currently proposed 2027 price - a crosswalk x 3 - in the next screen shot.

click to enlarge

You can see in the "recommendations" box, a lot of other crosswalks were suggested along the journey, besides 81327 x 3.  Like 0433U, 0005U, 0399U, 81528, and gapfill.

The Fly in the Ointment

So far, you see that 0464U was crosswalked [mostly] to 81327 in Fall 2024, and lacking any other PAMA price, CMS is happy to repeat that for 2027.  (In fact, they are retrieving and reusing over a hundred old crosswalks in this way).

The problem is, as shown in the next screenshot, PAMA has dutifully deflated the price of code 81327 from $192 down to $126 (when fully worked in).
click to enlarge


81327 Deep Dive

This is the distribution of 81327 PAMA data.   Per CMS,  12 TINS reported. There were 66 events at 39 price levels from $33 to $461.  No payments aggregated at the CMS rate of $192.  Most specific prices occured only once or twice in the 66 events.

click to enlarge

ADLT
As far as I know, as a sole source FDA test Cologuard Plus could be converted to ADLT pricing, which would kick off at the lowest list price on the first date it was marketed to the public.  

##
Median = 34th event of 66 events




Using AI to Search Pub Med

We often hear the first step in learning to use AI, is using it as a big powerful kind of Google.

I find AI can often work as a "big powerful PubMed," going beyond the use of keywords in Pubmed and using instructions that AI can interpret and understand.  Also, since the domain is PubMed to start with, the risk of (hallucinations) should go from tiny to zero.

Here's an example from my work this afternoon:

##

Prompt (Chat GPT 6)

Use PubMed etc. to find four or five major comprehensive reviews or how-to articles about  external control groups (ECG).   If there is an FDA white paper or guide on this topic add that too.   Please provide each in bibliographic references including hot link and PMID.   They don't all have to be open access, but, at least 2 should be.

##

[30 seconds]

[Response]

These five papers make a strong reading set: broad methodological reviews, a practical step-by-step article, and an FDA-authored oncology review. Three have open-access full text in PubMed Central, linked below. The literature commonly uses external control arms (ECA) as well as external control groups (ECG).

  1. Seeger JD, Davis KJ, Iannacone MR, et al. Methods for external control groups for single arm trials or long-term uncontrolled extensions to randomized clinical trials. Pharmacoepidemiology and Drug Safety. 2020;29(11):1382–1392. doi: 10.1002/pds.5141.
    PMID: 32964514 · Open-access full text
    Best broad methodological starting point. Covers selection of suitable external data, differences between trial participants and external populations, threats to valid comparisons, and design and analytical approaches to mitigate bias. Directly addresses both single-arm trials and long-term extensions. PubMed

  2. Burcu M, Dreyer NA, Franklin JM, et al. Real-world evidence to support regulatory decision-making for medicines: Considerations for external control arms. Pharmacoepidemiology and Drug Safety. 2020;29(10):1228–1235. doi: 10.1002/pds.4975.
    PMID: 32162381 · Open-access full text
    Best bridge between methods and regulatory use. Explains how the regulatory question should determine the data source, study design, and analysis, with attention to data fitness, confounding, and credible evidence generation. PubMed

  3. Schmidli H, Häring DA, Thomas M, Cassidy A, Weber S, Bretz F. Beyond randomized clinical trials: Use of external controls. Clinical Pharmacology & Therapeutics. 2020;107(4):806–816. doi: 10.1002/cpt.1723.
    PMID: 31725899 · Publisher/DOI link
    Best statistical overview of two distinct uses: constructing an external comparator for a single-arm trial and supplementing a randomized trial with external evidence. Includes worked case studies involving propensity-score matching and Bayesian borrowing. PubMed

  4. Lambert J, Lengliné E, Porcher R, Thiébaut R, Zohar S, Chevret S. Enriching single-arm clinical trials with external controls: Possibilities and pitfalls. Blood Advances. 2023;7(19):5680–5690. doi: 10.1182/bloodadvances.2022009167.
    PMID: 36534147 · Open-access full text
    Best explicit “how-to” article. Organizes the work into three steps: define the treatment effect and population of interest, select appropriate external controls, and choose the corresponding statistical approach. Uses a multiple-myeloma example but offers broadly applicable guidance for conducting or critically appraising these studies. PubMed

  5. Mishra-Kalyani PS, Amiri Kordestani L, Rivera DR, et al. External control arms in oncology: Current use and future directions. Annals of Oncology. 2022;33(4):376–383. doi: 10.1016/j.annonc.2021.12.015.
    PMID: 35026413 · Publisher/full-text link — PubMed labels this a free article.
    Best FDA-perspective review. Written by FDA investigators, it combines an introduction to external controls, study-design considerations, and case studies from marketing applications submitted to FDA. Especially useful for understanding how methodological issues affect regulatory interpretation. PubMed

  • FDA guidance to add

U.S. Food and Drug Administration. Considerations for the Design and Conduct of Externally Controlled Trials for Drug and Biological Products: Draft Guidance for Industry. February 2023. CDER, CBER, and Oncology Center of Excellence.
FDA guidance page · Free PDF · PMID: Not applicable—FDA guidance document.

This is the directly relevant FDA document, and FDA currently still labels it draft, not final. It addresses population comparability, treatment differences, alignment of “time zero,” outcome measurement, missing data, analysis, and FDA access to supporting records. Its scope is patient-level external controls drawn from other trials or real-world data; it does not cover external-data supplementation of an existing randomized control arm. FDA


###

Write a 250 word summary or recent priorities, emphases, and/or newer ideas, based on your reading of the above.  Use headers or subheaders for clarity.

###

From Convenient Comparators to Planned Studies

Across these reviews and FDA’s draft guidance, the central emphasis is that an external control group should be designed as part of the study’s evidentiary strategy. Credibility depends on specifying the clinical question, eligibility criteria, outcomes, and analysis before examining comparative results. Finding an available database is only the beginning. pmc.ncbi.nlm.nih.gov

Comparability Extends Beyond Patient Matching

Matching age, diagnosis, and disease severity is insufficient. Investigators must also align treatment eras, background care, outcome definitions, assessment schedules, and the start of follow-up (“time zero”). Differences in these features can create apparent treatment benefits even when baseline characteristics look balanced. Missing data and inconsistent measurement deserve particular attention. pmc.ncbi.nlm.nih.gov

Define the Effect Before Choosing the Method

A prominent methodological emphasis is defining the estimand: precisely which treatment effect, in which population, the study seeks to estimate. That choice should guide comparator selection and statistical analysis. Propensity-score methods can address measured differences; they cannot automatically eliminate unmeasured confounding. Sensitivity analyses therefore help assess how robust conclusions are to remaining uncertainty. pubmed.ncbi.nlm.nih.gov

External Evidence Has Multiple Roles

External data can supply the entire comparator for a single-arm trial or supplement an existing randomized control arm. Bayesian borrowing offers an approach to the latter, making assumptions about compatibility between historical and current evidence especially consequential. These applications require different methodological and regulatory considerations. pubmed.ncbi.nlm.nih.gov

Regulatory Credibility Requires Transparency

The overarching priority is demonstrable fitness for purpose: appropriate data, prespecified methods, explicit limitations, and accessible supporting records. Early FDA discussion helps establish whether the proposed comparison can support the intended regulatory decision. www.fda.gov

##

##

Is there overlap between the field of expertise of 'external control arms' and the rising field called "target trial emulation?"  Up to 150 words (if needed).

##

Yes—substantial overlap in both expertise and methods. Both draw on causal inference, epidemiology, biostatistics, and careful management of confounding and selection bias.

The distinction is that an external control arm describes where the comparator comes from, while target trial emulation describes a framework for designing the comparison: specify the hypothetical randomized trial, then align eligibility, treatment strategies, “time zero,” follow-up, outcomes, and analysis with that protocol.

TTE can therefore guide construction of an external control arm for a single-arm trial. It can also compare treatments entirely within observational data, without an actual clinical trial. External-control studies add challenges because trial and routine-care data may be collected differently. frontiersin.org

A directly relevant paper is Arnold et al. (2024), “Application of the target trial emulation framework to external comparator studies” (PMID 40979394). (Open text.)  Neither approach, by itself, eliminates unmeasured confounding. 7pp

##

Note to self - see also PMID 40827506.

An Early View: Stakeholders Respond to FDA's Concept Paper on LLM-SAMD

One brick at a time, FDA has been advancing LLM-based SAMD.  See the approval of draft-report software for ultraound and see the breakthrough status for radiology CXR draft-report software and see FDA's $1.3M contract for accelerating the regulatory science for radiology diagnostic reporting with AI.

There's also the "big story"- in August FDA released a major concept paper for SAMD in an increasingly LLM world.  

By October 19, some 540 comments were submitted.  Up to yesterday, FDA had released 129 of the comments.  I had Chat GPT filter them for "most important ten comments" on which this preliminary article is based.

See e.g. the AMA's press release on its own comment to the FDA - here.


#

See a seven-page white paper PDF in the cloud - here.



###

AI Corner Chat GPT

###

FDA Generative AI Medical Device Consultation

What the early comments reveal

ChatGPT 6 • October 20, 2026

FDA’s discussion paper on generative AI medical devices asks how to evaluate software that can produce open-ended clinical responses, change over time, and increasingly take actions. The early comments suggest substantial agreement on the need for a flexible framework, but a significant disagreement about what flexibility should mean. The central question is whether stronger supervision and monitoring can justify less evidence before deployment—and what would demonstrate that those safeguards actually protect patients.

What FDA proposed

Released in August, FDA’s paper outlines a possible approach to generative AI-enabled medical devices and poses 26 questions to stakeholders. It is an exploratory discussion paper, not a new rule or guidance. Its scope extends beyond text-based chatbots to multimodal systems, including applications that interpret images and agents that use tools or execute clinical tasks. [1]

The paper begins with two dimensions of risk: what a device does, including how directly it influences or initiates action, and the consequences of an erroneous output. A general explanation of a disease differs from a patient-specific recommendation, which in turn differs from a system that places an order. But the distinctions are not always clean. An apparently informational response can influence treatment, and a conversation can move from education into urgent medical advice.

For evaluation, FDA proposes competency-oriented benchmarking followed by clinical confirmation. Benchmarks would test capabilities such as clinical knowledge, information gathering, communication, recognition of uncertainty, escalation, and staying within scope. Clinical confirmation would then examine whether those capabilities translate into acceptable performance in the intended setting. The paper contemplates evidence proportionate to risk, rather than requiring the same clinical study for every application.

After deployment, monitoring and change control would address evolving models, shifting populations, and failures that initial testing could not fully anticipate. FDA also asks about independent evaluators, synthetic data, foundation-model information sharing, and the additional risks of autonomous agents.

Two of the 26 questions expose the most consequential choices. Question 18 asks whether stronger postmarket monitoring could justify accepting greater premarket uncertainty. Question 15 asks whether performance should sometimes be compared with the care actually available without the device, including delayed care or no intervention. These questions connect regulatory flexibility to patient access, while raising concerns about who bears the risk of getting that balance wrong.

An early but substantial response

This assessment draws on a selection of substantive early letters, largely from September, together with major October responses from the American Medical Association, American Hospital Association, neurosurgical societies, Personalized Medicine Coalition, and U.S. Chamber of Commerce. It also considers University of California Health’s publicly summarized recommendations. The public docket snapshot showed 541 submissions received but only 129 published, with the available docket export extending through September 30. The findings are therefore an interim reading of significant arguments, not a measure of opinion across the completed consultation. [2]

The device and its workflow matter more than the model label

A recurring response is that risk depends on a particular clinical function and its surroundings. How quickly could harm occur? Can an action be reversed? Can a clinician check the original evidence? Does the user have the necessary expertise? FDA already raises many of these considerations; commenters are pressing for clearer ways to translate them into evidence requirements.

The American College of Allergy, Asthma and Immunology offers a concrete example. Advice about anaphylaxis operates under very different time constraints from advice about long-term asthma management. A similar-sounding recommendation can carry a very different risk when there is little time to recognize and correct an error. Newton’s Tree argues that FDA needs an explicit analysis of hazards, controls, and remaining risk more than it needs additional axes on a diagram. [3, 4]

UltraAI contributes a useful distinction between presenting an existing clinical claim and generating a new one. A system that faithfully summarizes a physician’s report is doing something different from one that infers a diagnosis from an image. Even a summary becomes clinically generative when it changes “cannot exclude” into “is present,” or combines findings into a diagnosis that the source never made. Attaching a citation does not establish that the cited material supports the claim. [5]

These arguments favor evaluation at the level of the clinical function. They also challenge the idea that cautious wording or a disclaimer can determine risk. The Chamber adds a separate qualification: a useful risk framework should not silently become a new legal classification system or automatically determine the regulatory pathway. [6]

Supervision is a clinical capability that must be tested

The AMA’s October 16 letter makes one of the strongest arguments in the consultation: meaningful physician supervision requires more than placing a human at the end of an automated process. The reviewer needs relevant information, expertise, time, cognitive capacity, and authority to reject or stop the system. Supervision also consumes resources. A physician working under ordinary clinical pressure cannot be assumed to perform like a specially trained research reviewer with unlimited time. [7]

University of California Health’s summarized recommendations similarly emphasize the deployed combination of model, prompts, information retrieval, safeguards, and workflow. S. Joseph Sirintrapun, writing in a personal capacity from his experience in pathology and informatics, stresses the practical ability to identify consequential errors. The implication is that supervision itself belongs in the validation study. [8, 9]

RADIN and Total Medical Imaging propose a particularly specific radiology application. They ask FDA to exercise narrowly bounded premarket enforcement discretion for AI-generated drafts that remain private to the interpreting radiologist until affirmative specialist sign-off. The radiologist would have the source images, could edit or reject the text, and would control whether anything enters the clinical record. The proposal excludes automatic finalization and independent ordering or triage. This is a requested policy for a defined workflow, not permission already granted by the discussion paper. [10]

The tension with the AMA is productive. RADIN asks how much regulatory credit a tightly controlled specialist workflow should receive; the AMA asks what evidence establishes that the reviewer can provide the assumed protection. A persuasive answer would measure the performance of the human–AI team: errors introduced, errors caught, omissions corrected, review time, and effects on downstream care.

For radiology and pathology, that is a pivotal research question. A draft can improve performance by directing attention to an overlooked finding, or impair it by anchoring the specialist to a plausible error. Interface design and review burden help determine which effect predominates. Measuring the model alone will miss much of the clinical value—and risk.

Industry does not speak with one voice on premarket flexibility

The most important disagreement concerns the trade between evidence before deployment and surveillance afterward. It does not divide neatly into developers seeking flexibility and physicians demanding caution.

Commenter

Position on the trade

AMA

Necessary premarket assurance should not be reduced on the assumption that later monitoring will compensate.

UltraAI

Monitoring generally complements premarket evidence; substitution would require reliable detection and mitigation before harm.

Clearstep

Supports greater premarket uncertainty in exchange for robust, prespecified monitoring and architectural safeguards.

Personalized Medicine Coalition

Supports conditional flexibility when errors are detectable, reversible, and subject to prompt intervention.

American Hospital Association

Supports streamlined pathways and lifecycle monitoring, with developer responsibility and adequate implementation resources.

 

These positions, set out in the respective submissions, identify the real decision facing FDA. [5, 7, 11–13] It is not simply how much monitoring a sponsor promises. It is whether that monitoring can detect the relevant failure early enough for intervention to matter. A readily reversible error differs from a missed diagnosis discovered months later or an autonomous action that cannot be undone.

UltraAI’s caution is especially noteworthy because it comes from a developer. The company argues that reducing premarket evidence can transfer the discovery of uncertainty to patients while giving the sponsor the benefit of earlier entry. Clearstep, by contrast, argues from its experience with hybrid clinical logic and ongoing clinician review that a stronger postmarket program can support greater flexibility. Their differences reflect competing theories of how safety can be demonstrated, not merely different attitudes toward innovation.

The economic question is just as important. The AMA objects to shifting surveillance work and unresolved product risks onto physicians. AHA emphasizes the burden on hospitals, particularly those with limited resources. A framework that depends on continuous clinical review needs a credible answer about who supplies the labor, data access, and funding.

Better benchmarks require better clinical measurement

The comments generally support structured evaluation, but warn against equating examination performance with clinical reliability. Newton’s Tree offers a useful three-part formulation: establish task competency, confirm clinical performance in the intended environment, and maintain assurance during operation. Each answers a different question. [4]

UltraAI proposes scoring the clinical claims within a report against a reference standard. Different wording can express the same correct finding; elegant wording can conceal a false one. For higher-risk uses, the company also urges developers to constrain the range of inputs and outputs where feasible, rather than assume every application needs unrestricted generation. [5]

The ARPA-H ADVOCATE and Johns Hopkins Applied Physics Laboratory team response adds statistical and operational discipline. Repeated answers to the same case are not independent patients. A large synthetic dataset should not overwhelm evidence of weak performance on real cases. And deployment scale matters: a seemingly modest error rate can become a substantial burden when repeated across a large population. [14]

Several submissions also envision shared evaluation infrastructure. UC Health’s summary proposes refreshed, sequestered benchmarks distributed across health systems; AHA favors multiple qualified evaluators rather than a costly bottleneck. Such arrangements could reduce duplication and improve comparability, but would require sustained governance and funding. The consultation is beginning to identify a market for trusted evaluation services as well as a regulatory need for them.

The less obvious failures deserve attention

Some of the most useful comments broaden the discussion beyond hallucination. Nina Vasan’s Stanford Brainstorm letter draws on evaluations of consumer and youth-facing AI to emphasize omissions, harmful affirmation, and risks that build over repeated interactions. An answer can be factually defensible while reinforcing unhealthy behavior or failing to ask the question that would reveal an urgent problem. These examples inform potential medical-device failure modes rather than establish performance rates for regulated devices. [15]

Escalation provides another example. A system can recognize the need for help and still fail if its alert arrives late, reaches nobody, or sends the patient to the wrong service. Newton’s Tree and Stanford therefore emphasize the completed handoff, not merely the generated warning. This turns an apparently linguistic capability into an operational outcome that can be measured. [4, 15]

Luma’s focused response to FDA’s no-device comparator question raises a different concern: in assistive communication, a system may generate apparent patient speech when no meaningful input was supplied. In that situation, silence can be safer than a fluent fabrication. The AMA approaches the comparator issue from an equity perspective, warning against using limited access to care to justify a lower safety standard for underserved populations. Together, these arguments show why access benefits and minimum safety requirements need separate consideration. [7, 16]

Stanford also raises a rarely discussed lifecycle problem: what happens when a patient has come to depend on a service and the product disappears? For longitudinal applications, advance notice, access to records, referral, and transition support can be clinically important. The relationship between patient and product may outlast the business offering it.

Updates and agents make accountability harder

A medical AI application can change without an obvious change to its interface. The underlying model may be replaced, a prompt revised, a retrieval source updated, or a tool given new permissions. Any of these can alter clinical behavior. UC Health’s summarized call for users to know when the AI changes is particularly important: a model that improves on average can still degrade a previously validated use. [8]

This makes upstream information and control essential. Stanford seeks enforceable rights to version information, change notice, incident disclosure, and support for investigations. Newton’s Tree sees voluntary foundation-model master files as potentially useful, but insufficient to demonstrate the safety of a finished device. Accountability is difficult to exercise when a manufacturer cannot identify or control a dependency on which its product relies. [4, 15]

Agents add the ability to act. A system that schedules, orders, or writes to records must be evaluated across the sequence of decisions and tool uses, including its permissions and ability to stop or recover. The ADVOCATE/JHU APL response and Newton’s Tree emphasize these system-level tests. Individual commenters, including C. D. Rowsell Jr. and Tanisha Tejada Thoreau, add proposals for revalidating authority during execution, audit trails, and runtime stopping controls. These are candidates for development and validation, not established FDA requirements. [4, 14, 17]

An AI supervisor introduces a further dependency. A second model may share the first model’s blind spots rather than independently detect them. The monitoring system therefore needs its own evidence of reliability—a point that connects directly with FDA’s radiology research activity.

The overlapping radiology research contract

FDA’s approximately $1.3 million, 18-month research contract with Cognita Imaging illustrates the related evaluation problem. Announced by Cognita Imaging/Radiology Partners in September, the project uses multiple LLM evaluators and radiologist adjudication of important disagreements to study radiology-report assessment across approximately one million examinations. Its aims include scalable evaluation methods, cohort-size requirements, and practical guidance relevant to premarket and postmarket assessment. [18]

The overlap with the consultation is clear: can automated evaluation make clinical assessment more scalable while retaining trustworthy clinical judgment? There is no established formal linkage between the contract and this docket. They nevertheless occupy overlapping parts of FDA’s research agenda—benchmark validity, AI-assisted supervision, and reliable assessment of generated clinical content. The contract is an investment in evaluation methods, not a regulatory authorization or an answer to the broader debate.

What FDA is getting for its effort

The consultation is producing something more useful than a tally of support and opposition. It is identifying the conditions under which a flexible approach might be credible, and the evidence needed to distinguish effective safeguards from reassuring descriptions.

Its most valuable contribution may be to make broad terms testable. “Human oversight” becomes performance under realistic workload. “Escalation” becomes a completed, timely handoff. “Continuous monitoring” becomes a specified ability to detect a failure before harm accumulates. “Change control” becomes the ability to identify, evaluate, and, when necessary, reverse a clinically consequential modification.

FDA is also learning where implementation could fail for reasons beyond model accuracy. Responsibility, information, operational control, and funding may sit with different organizations. A manufacturer may remain accountable while depending on a foundation-model supplier for change information and a hospital for the data needed to detect problems. Resolving those relationships is part of making lifecycle regulation work.

The comments do not yet prove that the proposed methods are sufficiently reliable or affordable. Nor does conditional support establish consensus about how much premarket uncertainty is acceptable. But the submissions are sharpening that disagreement into questions FDA can investigate: which failures are detectable, how quickly, by whom, and with what effective response?

As more October submissions become available, the most valuable additions will be evidence about those questions—comparative workflow studies, measured supervision performance, monitoring costs, and experience from patients and health systems. The initial record has already moved the debate toward the practical terms on which generative AI could earn a place in clinical care. FDA’s next challenge is to turn those terms into proportionate, reproducible evidence requirements.

Selected sources

1. FDA, Considerations for the Regulation of Generative AI-Enabled Medical Devices, August 2026, especially Appendix B’s 26 questions. https://www.fda.gov/media/194242/download

2. Regulations.gov, docket FDA-2026-N-7874, public-comment snapshot reviewed for this assessment. https://www.regulations.gov/docket/FDA-2026-N-7874

3. American College of Allergy, Asthma and Immunology, September 25 comments.

4. Newton’s Tree, response to FDA’s generative AI discussion paper.

5. UltraAI, September 28 comments, especially the summary on pages 3–6.

6. U.S. Chamber of Commerce, October 19 comments.

7. American Medical Association, October 16 comments.

8. Karandeep Singh, public summary of University of California Health’s October 19 response.

9. S. Joseph Sirintrapun, personal-capacity comments, September 8.

10. Total Medical Imaging and RADIN, joint comments on radiologist-supervised report predrafting, September 25.

11. Clearstep, response to FDA’s generative AI discussion paper.

12. Personalized Medicine Coalition, October 19 comments.

13. American Hospital Association, October 19 comments.

14. ARPA-H ADVOCATE and Johns Hopkins Applied Physics Laboratory team response.

15. Nina Vasan, Brainstorm at Stanford, August 19 comments.

16. Christman/Luma, response to Question 15 on counterfactual comparators.

17. C. D. Rowsell Jr. and Tanisha Tejada Thoreau, separate comments on runtime controls and agent governance.

18. Radiology Partners/Cognita Imaging, announcement of FDA report-evaluation research contract, September 16. https://www.radpartners.com/2026/09/cognita-imaging-receives-fda-contract-to-test-new-approach-to-evaluating-generative-ai-in-radiology/