Thursday, April 16, 2026

Some Thoughts on the Revisions to AMA Appendix S for Software-Intensive Services

 

Header - For a year, AMA has circulated larger and larger revisions of Appendix S, its position on software-intensive services.    Here, I argue not for or against specific redlines (which may be copyright or confidential) but rather I discuss some general principles.

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In 2023, the AMA added an “Appendix S” to the AMA CPT procedures and codes handbook.  Appendix S does not define what advanced software is, but when it occurs, Appendix S proposes that each instance of such software services can be classified as “Assistive, Augmentive, or Autonomous.”   In 2025 and now 2026, AMA has proposed multiple versions of a revised – and now very heavily revised – Appendix S.  

In this note, I’m not commenting on particular changes (which may be copyright or confidential) but on the overall themes and attendant problems.   The main references, then, are the current public Appendix S (fn 1).  I also recommend readers see a publication about Appendix S (fn 2) and a recent article by Dr. Richard Frank (fn 3).  AMA may later introduce a new coding category CMAA. (fn 4).

From my perspective as a physician-MBA working in strategy consulting, here are some of the important, but less-discussed challenges.

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First, while the latest of many dense revisions belongs to AMA, I don’t think it violates confidentiality to say it is virtually unreadable, a dense mat of revisions, strikeouts, inserts, and more revisions atop one another.   At a minimum, AMA should also issue a CLEAN version of their most recent proposal at any given time.

 

Second, the extent of revisions suggests that piling many layers of revisions on top of the original is no longer productive or optimal.  For example, the US Constitution is not a 99% redline of the Articles of Confederation, they wrote a new document.   It would likely be more fluent and lucid to simple write a new document and not have a hodgepodge of preserved word pairs or phrases under mountains of redlining.

Third, we should address whether the continued use of an early idea, “assistive, augmentive, autonomous” makes sense.  AMA attempts – and it’s nearly impossible – to address disjunct concepts at once, such as detection, parameter generation, interpretation, physician involvement, and machine-initiated actions.  We may be better calling things SW Type 1, Type 2, Type 3.   Commandeering existing adjectives that don’t naturally fit together (but happen to have clever alliteration) may confuse more than help, by pulling in legacy meanings of the words chosen.

Fourth, the projects needs much more than a couple examples out of the  universe of software solutions.   Machines, and computer programs, need extensive “beta testing” which in this case might be 20 or 30 examples fed into the most current revision.   Do 4 experts independently agree which of the 20 or 30 examples belong as subjects of Appendix S?  Likely not.  (AI is not defined, etc).   How high is the independent reviewer agreement on how the 30 examples parse in to 3 buckets (A1, A2, A3)?  Likely the kappa statistic for agreement would be distressingly low.  But we have no data.  

Fifth, structured use might be very helpful.  Take software X, and ask first, does it fit “augmentative?’  If yes, stop.   If not, then there are only two choices: is it assistive or argumentative?   Bringing algorithmic structure to the usage of the appendix might be helpful.  

Sixth, and this circles back to the beginning.  Appendix S purports to subtly categorize – we would assume and hope with high precision, for some cloudy universe of software-intensive services like AI and Machine learning, while not defining at all what does or doesn’t come into the domain of Appendix S is the first place.  Yet we expect Appendix S rules to work precisely and consistently.   That may be crazy and lead to all kinds of downstream problems that we aren’t facing. 

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I believe that Appendix S was designed originally for software-only services.  If so, we need to codify that.  We should state clearly that physical services (like whole genome sequence) that may use a lot of AI, remaining coded based on the physical service component (81425, genome) and not pulled onto CMAA by the AI within.   For example, WGS may yield a variant of unknown significance VUS (C>T), which is resolved as benign by AI proteomic software that validates there is no protein configuration change.  I would expect the service is still WGS with resolution of variants, billed as 81425.  I would be chilled if the WGS service got extracted to a payor-not-recognized code over in CMAA, because the service contains AI in part.  At some point Appendix S should make this clear, the physical part of the code governs coding and a folded-inside AI component does not drag everything onto the CMAA listing.  

 

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1.  https://www.ama-assn.org/system/files/cpt-appendix-s.pdf

2. Frank, 2022, PMID 36463327.  https://pmc.ncbi.nlm.nih.gov/articles/PMC9719561/ 

3. https://www.frankhealthcareadvisors.com/post/cpt-appendix-s-the-missing-link-between-ai-innovation-reimbursement-1 

4.  https://www.ama-assn.org/practice-management/cpt/cpt-codes-offer-language-report-ai-enabled-health-services   [CMAA]