LS&HC Horizons 2023 - Flipbook - Page 22
Hogan Lovells | 2023 Life Sciences and Health Care Horizons | Digital Health and AI
Medicare payment for AI-based health care services
The Medicare program is known to have
many challenges with appropriately paying
for innovative new technologies and AI-based
health care services have pushed that envelope.
But the Centers for Medicare & Medicaid
Services (CMS), the agency responsible
Medicare payment policy, is trying to catch up.
In recent years, CMS has begun to formulate
an informal mechanism for reimbursing
AI-based health care services (what CMS refers
to as “Software-as-a-Service” (SaaS)) in the
hospital outpatient setting. In 2022, for AIbased services that rely on a separate imaging
procedure (e.g., computed tomography), CMS
expressly provided separate payment for the
AI-based service from the underlying imaging
procedure in the hospital outpatient setting.
This was a major step to ensuring appropriate
payment for AI-based services by Medicare.
CMS also requested comments on its payment
policies for SaaS procedures, but did not make
any formal policy proposals.
Victoria M. Wallace
Counsel, Washington, D.C.
In the coming year, we hope to see more
policy from CMS that facilitates timely and
appropriate Medicare coverage and payment
for AI-based services. CMS has indicated that
it will engage in rulemaking in 2023 to create a
pathway to more timely coverage for innovative
new technologies, which could include AIbased health care services. Legislation also has
been introduced to provide coverage for devices
(including AI-based products) designated as
“breakthrough devices” by FDA. Additionally,
CMS may make payment policy changes for
“SaaS” procedures in response to its comment
solicitation last year.
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