Two U.S. Senators have co-sponsored a bill that would create a better pathway for Medicare coverage of FDA-approved AI tools for clinical care.
One of the barriers to AI adoption in clinical care is the lack of a clear financial ROI. A new bill before Congress aims to make that process a little bit easier.
U.S. Senators Mike Rounds (R-South Dakota) and Martin Heinrich (D-New Mexico) are sponsoring the Health Tech Investment Act (S.1399), which would expedite the pathway to Medicare reimbursement for clinical AI tools.
“Medicare patients deserve access to the life-changing care that artificial intelligence-enabled devices can offer,” Rounds said in a press release announcing the bill. “There is currently no clear Medicare payment system for these devices, meaning that it can take years to be approved and paid out by Medicare accurately. This legislation would create that system, improving diagnoses and encouraging the adoption of AI devices in clinical settings.”
The bill would enable AI-enabled medical devices approved by the U.S. Food and Drug Administration (FDA) to receive a New Technology Ambulatory Payment Classification (APC) in the Hospital Outpatient Prospective Payment System (OPPS). That classification would be good for five years, giving the device maker and providers time to gather data to support a permanent reimbursement code.
The fast-paced development of AI tools in the healthcare space has created a noticeable gap between implementation and governance. According to Rounds and Heinrich, the FDA has approved more than 600 AI-enabled devices, but the Centers for Medicare & Medicaid Services (CMS) “lacks standard or consistent methods for covering and paying for these products.”
And without reimbursement, providers are reluctant to adopt the technology. Many health systems and hospitals, particularly non-profits and rural organizations, are operating on razor-thin margins, and executives won’t likely introduce new tools unless CMS backs them financially.
The bill has garnered support from several advocacy groups, including the National Health Council and the Advanced Medical Technology Association (AdvaMed).
“AI’s role in improving patient care is already evident and increasing, particularly in radiology, where AI can help doctors and other healthcare professionals swiftly analyze medical images, detect illness and abnormalities, and make a more informed diagnosis,” AdvaMed said in a press release. “Moreover, FDA authorized AI-enabled medical devices are poised to save the healthcare system resources due to enhanced diagnostic and therapeutic precision that can help drive efficient and effective care.”
“With AI-enabled medical technologies already making remarkable strides in patient care, and with even more incredible strides ahead of us, now is the time to establish a predictable reimbursement pathway,” Scott Whitaker, the group’s president and CEO, said in the release.
Eric Wicklund is the associate content manager and senior editor for Innovation at HealthLeaders.
KEY TAKEAWAYS
Healthcare leaders are reluctant to embrace new technology like AI without Medicare reimbursement.
A new bill before Congress would create a temporary classification for AI-enabled medical devices to receive coverage, and give device makers and providers five year to collect data for permanent coverage.