Bipartisan Bill Introduced for Medicare Reimbursement of AI-Based Healthcare Services
Overview of the Legislation
Bipartisan legislators have recently proposed a bill aimed at establishing a Medicare reimbursement pathway for healthcare services driven by algorithms. Although the text of the House bill was not available at the time of reporting, AdvaMed noted that it aligns with a previously introduced Senate proposal, which outlines five years of cost-based reimbursement for specific medical devices. AdvaMed praised the initiative, stating that it “seeks to improve health outcomes for Medicare patients through the creation of a clear and consistent reimbursement pathway.”
Details of the Senate Proposal
The Senate bill encompasses particular devices that have received clearance or approval from the Food and Drug Administration (FDA). The eligible devices utilize artificial intelligence, machine learning, or similar software to deliver services that produce clinical outputs or conclusions for physicians. These outputs help in screening, detecting, diagnosing, or treating various health conditions. The legislative proposals aim to alleviate challenges faced by companies in the commercialization of these advanced devices in the United States.
Legislators’ Perspectives
Representative John Joyce, R-Pa., one of the six lawmakers who introduced the House bill, emphasized that the legislation would guarantee that AI-enabled devices receive an appropriate payment code from the Centers for Medicare and Medicaid Services (CMS). The qualifying devices will be classified under a new technology ambulatory payment classification. This model is designed to ensure the collection of essential data regarding delivery and service costs prior to the assignment of a permanent payment code.
Addressing Current Challenges
A report from the House published last year indicated that existing payment calculation methods are insufficient for properly reimbursing AI tools. Furthermore, lawmakers have suggested provisions for algorithm-based services that are performed concurrently with other procedures. The Senate bill categorizes these add-on services as separate new procedures.
Industry Insights
In response to the Senate bill earlier this year, attorney Ariel Seeley from Morgan Lewis pointed out that AI services frequently “lack clear billing codes and are absorbed into broader procedures.” AdvaMed’s CEO Scott Whitaker expressed optimism regarding the House bill, stating that it “will help ensure that AI-enabled medtech reaches its fullest potential.” He further remarked that the legislation would establish the clear, consistent, and stable reimbursement policy necessary for the sector to deliver technologies that can benefit patients at scale.