On April 9, 2025, the Health Tech Investment Act was introduced in the Senate, seeking to encourage the use of “cutting-edge” artificial intelligence (AI)-enabled medical devices by ensuring appropriate payment for the use of such devices under the Medicare program. Services that use such devices are referred to in the act as Algorithm-Based Healthcare Services (ABHS) and are defined as those that are “delivered through a device cleared to be approved by the Food and Drug Administration that uses artificial intelligence, machine learning, or other similar designed software to yield clinical outputs or generate clinical conclusions for use by a physician or practitioner.”
The areas covered consist of the “screening, detection, diagnosis, or treatment of an individual’s condition or disease,” along with “similar services as the Secretary [of HHS] determines appropriate in consultation with appropriate organizations.”
According to a related statement, such legislation is needed because there is “currently no clear Medicare payment system for these devices, meaning that it can take years [for the related services] to be approved and paid out by Medicare accurately.” More specifically, despite the fact that the FDA has approved over 600 AI-enabled medical devices, the Center for Medicare & Medicaid Services (CMS) “lacks standard or consistent methods for covering and paying for these products.” The effect of this in the long run is said to be that it will “impact the adoption and patient access to medically appropriate AI technologies across the country.” Due to this fact, it will likely remain difficult for patients to have access to such devices and benefit from them.
In order to remedy this, the act seeks to create a “consistent and predictable Medicare payment pathway for these technologies,” which can have the effect of “providing patients with earlier and more accurate diagnoses.” More specifically, it will assign all FDA-approved AI-enabled medical devices to a “New Technology Ambulatory Payment Classification (APC) in the Hospital Outpatient Prospective Payment System (OPPS) a minimum of 5 years so that adequate data regarding delivery and service costs is acquired before assignment of a permanent payment code.”
This will hopefully provide manufacturers and providers with “the certainty they need to invest in developing next-generation healthcare technologies and bringing them to market.”
Categories: AI
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