A record number of AI devices qualified for Medicare’s new technology add-on payments this year, according to STAT. The temporary payments give eligible technologies two to three years of extra reimbursement after they come to market, and are designed to help get new, expensive medical technologies to patients.
For AI startups, the add-on payments act as a sweetener that helps hospitals and health systems get on board with a new product, STAT reported in the latest installment of its Paying for AI series. Convincing providers that a technology will deliver return on investment is difficult, so the Medicare incentive lowers the barrier to adoption during the early years on the market.
The mechanism matters to hospitals because the promise of AI is financial as much as clinical. A tool that throws up a life-saving alert is far more likely to stick if it also proves it can drive down costs.
STAT’s Katie Palmer, who covers the price tag of clinical AI and digital health at the FDA, wrote the analysis. The series examines how new clinical AI tools influence the affordability of healthcare and patients’ long-term health.
