You’re reading Part 3 of Paying for AI, a series examining how new clinical artificial intelligence tools influence the affordability of health care and patients’ long-term health. Read Part 1 here, and Part 2 here.
For years, Medicare has been wrestling with how to pay for artificial intelligence and other software-based clinical tools. The Centers for Medicare and Medicaid Services is good at calculating the costs of physical items, from a cotton swab to the wear and tear on a CT scanner. But an algorithm to predict cardiac risk from a CT scan, or an AI-based map to visualize prostate cancer’s spread? Less so.
This month, in its proposed rules for hospital outpatient payments and physician fees for 2027, CMS has signaled that it’s ready to build a more consistent payment structure for clinical software and AI that factors in their impact on patient outcomes. It’s starting — as an interim step, just for 2027 — by proposing a practical change to the way it labels and pays for several clinical software and AI services.
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