Reform urged to facilitate payment & coverage of AI medical services in the U.S.

We recently hosted our 3rd annual AI Health Law & Policy Summit in Washington, DC where government and industry representatives joined members of the Hogan Lovells team to discuss new and emerging global health care AI policies. The article below is part of a series sharing key takeaways from the program.

Addressing concerns that the Medicare program, which was established in the 1960’s, has struggled with appropriately covering and paying for innovative AI technology, Victoria Wallace, Counsel in Hogan Lovells’ health care regulatory practice, moderated a panel including industry representatives from Mount Sinai Hospital, the American College of Cardiology, and Anitra Graves, MD, contract medical director at First Coast Service Options, Inc., a Medicare Administrative Contractor (MAC). They reflected on how science is speeding up, as regulatory flexibility seems to be slowing down in this arena.

Ms. Wallace and the panelists discussed new efforts to establish Current Procedural Terminology (CPT®)[1] codes for AI medical services. In dialogue with Richard Frank, MD, PhD, who has worked extensively in CPT coding and is an Editorial Panelist and co-chair of the Digital Medicine Coding Committee, Ms. Wallace described progress in coding for innovative AI services, citing the addition of CPT Appendix S, which categorizes AI into three main categories; Assistive, Augmentative, and Autonomous, according to the output of the device.

Panelists also discussed ongoing issues concerning Medicare coverage and payment for AI. Dr. Graves discussed innovative approaches that regulators are taking to addressing coverage issues for AI services and stressed that sufficient and appropriate clinical evidence is crucial for companies seeking coverage for their technologies. David Reich, MD, President, The Mount Sinai Hospital, highlighted opportunities for AI in healthcare outside of typical coverage pathways, noting that there can be tremendous value to health systems in AI that may not be separately payable but otherwise facilitates better and more efficient patient care.

Citing concern over coverage determinations being made on a case-by-case basis, Ms. Wallace pointed out that many parties in the system are urging reform by other stakeholder parties, whether it be the MACs, CMS, or Congress. The panelists agreed that industry would benefit from a harmonization of the terms used to describe AI, an alignment on the impact of the output, and synchronization of clinical evidentiary requirements with a focus on clinical meaningfulness along the continuum from FDA to CPT and CMS.

The takeaway is that while innovation is rapidly progressing, there is stagnation in facilitating reimbursement to promote patient access and continued investment in innovation. While key actors are taking steps to facilitate appropriate and timely reimbursement, coordination among the various parties will be key to make meaningful strides. In the meantime, companies should seek counsel from those with a deep understanding of the reimbursement framework in order to develop a market access strategy that is workable until meaningful change is made.


[1] CPT copyright 2023 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association


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