You'll be excused for thinking there are a lot of gray areas around digital pathology coding and pricing. On the coding side, AMA CPT made about a half-dozen Proprietary Laboratory Analysis (PLA) codes for whole slide imaging (WSI) and advanced software (SaaS, AI, ML), then AMA seemed to declare a moratorium on codes for similar services.
Coding?
Meanwhile, AMA CPT is holding feedback sessions on a possible new coding category called Clinically Meaningful Algorithmic Analyses (CMAA), which might encompass SaaS-like services for cardiology, radiology, pathology, and other fields. Linked In here, AMA CPT here, here.
Pricing?
That's coding. Meanwhile, CMS issued a call for comments on how it should price SaaS services (or AI, or ML) in Summer 2025 - here.
Some Solid Regulatory Touchpoints
This blog shows there is actually some solid ground here.
FDA Classifies Digital Pathology as "CLIA TEST"
First, with WSI and software based tests from Ibex (K241232) and ArteraAI (DEN240068), FDA classifies them first as PATHOLOGY tests, and then as CLIA HIGH COMPLEXITY TESTS. This means they are CLIA tests for CMS purposes, and CMS regulations have pricing rules for the CLFS.
See WSI and software classifed as CLIA High Complexity Test here (search keyword Ibex):
Note that FDA uses "PATHOLOGY" to encompass physician pathology (like a PMA CDx antibody) and clinical laboratory (like Illumina Trusight CGP which for FDA is "Pathology').
CMS Defines Clinical Laboratory Test = CLIA Text
To my knowledge, Medicare statute and regulations use the term "clinical laboratory test" and "clinical diagnostic laboratory test" (CLT, CDLT) but do not define them in an original way. In regulations, this tends to me that a community common definition is clear enough. For example, Medicare law doesn't define "appendectomy." However, CMS does define "clinical laboratory test" in Benefit Manual, Chapter 15, 80.1. There, CMS cuts and pastes language from CLIA law and uses it as a CMS definition of CLT.
Section 1833 and 1861 of the Act provides for payment of clinical laboratory services under Medicare Part B. Clinical laboratory services involve the biological, microbiological, serological, chemical, immunohematological, hematological, biophysical, cytological, pathological, or other examination ofmaterials derived from the human body for the diagnosis, prevention, or treatment of a disease or assessment of a medical condition. Laboratory services must meet all applicable requirements of the Clinical Laboratory Improvement Amendments. (Ch 15:80.1).
The highlighted language is verbatim from CLIA (42 CFR 493). CLIA uses this quotation to define a clinical laboratory, CMS uses the same language here to define a clinical test.
Once a Service is a CLIA Test, It's Priced by CLFS Rules
Once a service is classifed as a CLIA test, it is priced by Clinical Laboratory Fee Schedule (CLFS) rules. See SSA 1833, 1833A, 42 CFR 414.500ff. The pricing mechanisms are crosswalk, gapfill, ADLT, or PAMA resetting.
The only exception to CLFS pricing of lab services is laboratory tests that CMS extracts and classifies as physician pathology services, which always require the personal sign out of a physician. Based on 1970s-1990s law and ligitation, this is defined at 42 CFR 415.130. See also "AI Corner" at bottom. As a reminder, FDA categorization of products uses "pathology" differently, not to distingish a physician service but to include both pathology and clin lab tests.
CMS Precedent= WSI + SaaS = CLFS
CMS has clear precedent over several years of classifying PLA codes for WSI and software services as CLFS tests, the codes placed on the CLFS and the prices set by CLFS law and regulations. Examples and precedents include 0108U, 0220U, 0261U, 0295U, 0376U, 0414U, 0418U, 0512U, 0513U. See also here.
We Can Conclude....
AMA CPT could put WSI-AI services into a CMAA coding category, with other SaaS like radiology services.
However, FDA explicitly classifies WSI-AI services as pathology and CLIA services, from which point CMS has a defined pricing process (CLFS). CMS also has PLA precedents which indicate the same.
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AI Corner #1
See an AI version of the history of the debate over pathologists getting professional fees for each clin chem test; resulting law and regulations narrowing fees for a physician-pathologist lab service. Here.
AI Corner #2
Summarize this blog.
Digital Pathology Coding and Pricing: AI Summary
Key Message:
The blog argues that despite the perception of "gray areas," there is a well-established regulatory and payment framework for digital pathology, whole slide imaging (WSI), and AI/SaaS-based pathology tests—both on the coding and pricing sides.
Coding: Current State and Future Directions
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Existing Codes: AMA CPT has issued several PLA codes (e.g., 0108U, 0220U, 0261U, 0261U, 0295U, 0376U, 0414U, 0418U, 0512U, 0513U) covering WSI and advanced software services, which CMS has already placed on the CLFS.
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Moratorium: After a handful of these codes, CPT paused creating new ones, indicating some hesitation about proliferating WSI/AI-specific codes.
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Potential New Category: CPT is actively considering a new class of codes—Clinically Meaningful Algorithmic Analyses (CMAA)—that could standardize coding for SaaS/AI services across specialties (radiology, pathology, cardiology).
Pricing: CLFS Rules Apply
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CMS Policy Clarity:
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CMS explicitly asked for feedback in Summer 2025 on how to price SaaS/AI services, but its regulatory foundation is already in place:
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Once FDA classifies a product as a CLIA test (as it did with Ibex WSI [K241232] and ArteraAI [DEN240068]), CMS must price it under CLFS rules (SSA §§1833, 1833A; 42 CFR 414.500ff).
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Pricing methods are already well defined: crosswalk, gapfill, ADLT, or PAMA repricing.
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Historical Precedent: CMS has consistently priced WSI/AI tests under the CLFS for several years, reinforcing that these services are treated as lab tests, not physician services.
Regulatory Foundations and Statutory Linkage
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FDA’s Role: FDA classifies digital pathology products as pathology tests and CLIA high-complexity tests, putting them squarely in the lab regulatory space.
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CMS’s Definition of CLT: CMS adopts CLIA’s definition of a "clinical laboratory test" verbatim in the Benefit Manual (Ch. 15, §80.1).
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Physician Pathology Services Exception: The only services excluded from CLFS pricing are those narrowly defined in 42 CFR 415.130 as requiring physician sign-out (e.g., surgical pathology). Digital pathology software does not fall under this exception (per CMS decisions to date).
Conclusion
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CPT’s Next Move: The AMA may group digital pathology and WSI-AI under the new CMAA category for coding consistency.
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CMS’s Framework Is Ready: Since FDA classifies these services as CLIA tests and CMS has priced similar PLA codes via the CLFS, the regulatory and pricing pathway is already laid down. The challenge is not lack of policy but ensuring stakeholders recognize and use the existing pathway.
