Artificial Intelligence Payment Policies: Challenges For CMS And The Medicare Physician Fee Schedule

The proliferation of artificial intelligence (AI) clinical decision support technologies requires careful consideration of payment policies under the Medicare Physician Fee Schedule. In this Policy Insight, we identify key challenges faced by policy makers and the Centers for Medicare and Medicaid Services (CMS), and we discuss the interplay between the Medicare Physician Fee Schedule and the adoption of AI technologies in care delivery. The resource-based relative value scale methodology, which determines Medicare Physician Fee Schedule rates, was not designed for software-based technologies and requires both comprehensive adaptation and implementation reform. We recommend developing a policy framework for coverage determinations for AI technologies, reforming the resource-based relative value scale, creating clear reimbursement pathways for AI technologies, and implementing cost-effectiveness analysis to ensure that marginal Medicare expenditures yield proportional improvements in health care delivery and outcomes.