Life Sciences Horizons Brochure 2025 - Flipbook - Page 13
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2025 Horizons Life Sciences and Health Care
AI reimbursement framework evolves in the U.S.
As we look forward to what we might expect for
reimbursement for AI health technology in 2025,
it is helpful to first look backwards. The Medicare
program, administered by the Centers for Medicare
& Medicaid Services (CMS), often is the bellwether
for reimbursement policy. However, the program
will celebrate its 60th birthday in 2025, and it has
changed little since it was first implemented. AI
health technology certainly was not contemplated
as a reimbursable service when the Social Security
Act was first enacted.
This leaves CMS with the hard task of facilitating access to new
AI health technology that revolutionizes patient care, while also
staying within the statute for coverage and payment. With respect
to coverage, AI that is used to screen for certain conditions in the
absence of signs or symptoms of disease will continue to have
particular challenges unless the statute is changed to provide
greater screening coverage.
In terms of payment, to appropriately reimburse physicians
for costs associated with AI health technology, modernization
is needed for the current Physician Fee Schedule (PFS)
methodology, which provides payment for work, practice
expense, and malpractice. We continue to work with stakeholders
to push for these and other changes.
For investors in and developers of AI technology, ensuring robust
clinical evidence is essential both for Medicare and commercial
payer coverage. Oftentimes, the minimum evidence required
for marketing authorization from the U.S. Food and Drug
Administration (FDA) is not sufficient for coverage.
Investors and developers also should focus early on whether
AI technology is most appropriate as a separately reimbursed
service, or as a technology that can reduce costs for providers or
facilitate the provision of different reimbursable services. For
technologies pursuing separate reimbursement, an early strategy
is essential to identify whether there are existing reimbursement
structures applicable to a technology, which can facilitate quicker
coverage and payment (but perhaps at a lower payment rate), or
whether there is a need or desire to pursue new coding, coverage,
and payment, which can potentially lead to better coverage and
higher payment, despite coming with its own challenges in terms
of timing and uncertainty.
Victoria Wallace
Partner
Washington, D.C.
