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Who Will Pay for AI?

Melissa M Chen1, Lauren Parks Golding1, Gregory N Nicola1

  • 1Department of Radiology, University of Texas MD Anderson Cancer Center, 1400 Pressler St, Unit 1482, Houston, TX 77030 (M.M.C.); Triad Radiology, Winston-Salem, NC (L.P.G.); and Hackensack Radiology, Hackensack, NJ (G.N.N.).

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Summary
This summary is machine-generated.

In 2020, Medicare began reimbursing for artificial intelligence (AI) tools, including diabetic retinopathy diagnosis (IDx-RX) and stroke detection (Viz.ai), via two payment systems. This marks a significant step in AI adoption in healthcare.

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Area of Science:

  • Informatics
  • Technology Assessment

Background:

  • The Centers for Medicare & Medicaid Services (CMS), the largest U.S. health care payer, plays a crucial role in technology adoption.
  • Artificial intelligence (AI) is increasingly integrated into medical diagnostics and treatment pathways.

Purpose of the Study:

  • To describe the reimbursement pathways established by CMS for AI technologies in 2020.
  • To analyze the specific payment mechanisms within the Medicare Physician Fee Schedule (MPFS) and Inpatient Prospective Payment System (IPPS).
  • To propose future directions for AI reimbursement in health care.

Main Methods:

  • Review of payment policies established by the Centers for Medicare & Medicaid Services (CMS) in 2020.
  • Identification and description of specific AI applications and their associated reimbursement codes/systems.
  • Analysis of the MPFS and IPPS payment structures for AI technologies.

Main Results:

  • CMS established payment for AI in 2020 through the MPFS, including a new Current Procedural Terminology code for the AI tool IDx-RX for diabetic retinopathy diagnosis.
  • CMS also established a New Technology Add-on Payment under the IPPS for Viz.ai software, an AI algorithm for large-vessel occlusion stroke diagnosis and treatment.
  • These actions represent significant policy shifts enabling AI integration into clinical practice.

Conclusions:

  • Medicare's 2020 reimbursement decisions for AI tools like IDx-RX and Viz.ai signify a pivotal moment for AI in healthcare.
  • The established payment pathways in MPFS and IPPS provide a framework for current AI adoption.
  • Further development of reimbursement strategies is essential to support the ongoing integration and innovation of AI in health care.