CMS Seeks Cost-Effective Way to Pay for Software, AI Services

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The Medicare agency will shift to stand-alone, rather than packaged, payments for several algorithm-based imaging analysis tools, which could improve reimbursement. But CMS is also thinking long term about how to pay for “software as a service,” including AI/ML-based devices, more cost-effectively in its latest outpatient payment proposed rule.

AI algorithm-based software analysis tools have raised questions for CMS about how these advanced, increasingly prevalent, devices can fit into its existing payment frameworks. The latest forum for the Medicare agency to mull over these issues and take some actions is its 2023 hospital outpatient payment proposed rule, posted July 15.

As with several other Medicare documents issued in recent years—including the FY 2021 hospital inpatient rule and the 2022 Physician Fee Schedule proposal—in the latest outpatient proposal, CMS took an opportunity to make near-term decisions with some positive impacts for individual algorithm-driven software as a service (SaaS) devices, and, in parallel open up broader questions for future policy-setting. (See “Seeking Reimbursement for AI Tech? Five Things to Remember,” Market Pathways, September 8, 2021.)


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