Medicare may be able to quickly refund doctors for the use of artificial intelligence-based medical devices thanks to a bipartisan bill recently introduced in Congress.
A bill called the Health Tech Investment Act sets up payment systems for devices that use AI or machine learning. This is what co-hosts of the bill say providers will use technology in a clinical setting and help improve diagnosis.
“Medicare patients deserve access to the life-changing care that artificial intelligence-enabled devices can offer,” said Sen. Minecround, South Dakota, one of the bill’s co-hosts. in a statement on April 10.
How does it work? If the bill is signed to the law, a temporary Medicare payment code will be created for devices that use AI, machine learning, or “other software designed similarly.”
This temporary code will be applied to devices for at least 5 years. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) will collect data to determine a permanent payment code, according to a press release from bill co-stars.
caveat. If the bill passes, it would be a good first step towards creating a payment system for AI-based devices, but according to Jen Kerfoot, chief strategy and growth director for Medicare’s duos, what Medicare actually covers broadly would likely not “open the floodgates.”
For one, Kerfoot said the bill’s language is somewhat vague about what medical devices are covered by payment codes.
According to Kerfoot, AI-based medical devices are not currently at the top of the list of many payers and health systems priorities.
“The hospital system is currently about to face a bundle of tariffs, so we are trying to debate whether we need to buy a new MRI machine,” she said. He added that finding space for the health system and payer budget can be challenging as risk adjustments, part-D policies and changes in drug and usage costs must be balanced.
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Show me the money. It is unclear what financial impacts will be paid for AI-based medical devices, what Medicare will have.
Kerfoot said spending could increase first, but in the long run, devices could lead to cost savings. She said that some AI-based devices can detect diseases previously, allowing them to “reduce the need for more expensive interventions later.”
For example, a deep learning tool developed at Washington State University detects diseases faster and more consistently accurate than humans when reviewing histopathological slides, according to a 2024 study from the university.
The bill, if passed, could encourage the development of new and improved AI medical devices, Kerfoot said. This is because more companies may be willing to wear hats in the ring if they know that there is a payment system.
According to a survey by the American Physicians Association, the use of AI in healthcare has increased significantly in recent years, with 66% of approximately 1,100 doctors reporting that in 2024 they used AI as part of their workflow.
Although the bill has not moved since it was introduced last month, Advamed, the largest trading group in the medical device industry, praised the law, saying it was “important to advance patient-dependent medical advances.”
