Bill Seeks Reimbursement Pathway for AI-Enabled, FDA-Cleared Medical Devices
Mon Apr 14 2025
U.S. Senators Mike Rounds (R-S.D.) and Martin Heinrich (D-N.M.), co-chairs of the Senate Artificial Intelligence Caucus, have introduced legislation aimed at improving health outcomes for Medicare patients by encouraging the use of cutting-edge, artificial intelligence (AI)-enabled medical devices. The Health Tech Investment Act establishes a consistent and predictable Medicare payment pathway for these technologies, providing patients with earlier and more accurate diagnoses.
“Medicare patients deserve access to the life-changing care that artificial intelligence-enabled devices can offer,” said Rounds. “There is currently no clear Medicare payment system for these devices, meaning that it can take years to be approved and paid out by Medicare accurately. This legislation would create that system, improving diagnoses and encouraging the adoption of AI devices in clinical settings.”
“I’m proud to cosponsor legislation that expands Medicare coverage of new technologies and helps New Mexicans get the best, most affordable high-quality care they need when they need it,” said Heinrich.
“Too often the prolonged pathway to coverage for medical devices and technology delays patient access to the critical care they need,” said Randall Rutta, CEO of the National Health Council. “This issue has intensified as the pace of innovation has increased. The National Health Council is pleased to support the Health Tech Investment Act to help patients gain timely access innovative health solutions.”
“Senator Rounds’ legislation to create a Medicare coverage pathway for AI-enabled medical devices will be an important development for cancer patients in South Dakota,” said Jane Veerman, an oncology clinical research nurse at Sanford Health. “Patients in rural regions of the country are too often the last to be able to access medical innovation since too many rural providers lack the resources to invest in innovative technologies. Senator Rounds’ bill would give Medicare patients certainty that their hospitals and physician offices would be reimbursed for investing in AI-enabled technologies and bringing them to patient care.”
BACKGROUND:
The use of AI in healthcare is quickly becoming the standard of care, with practitioners using algorithm-based healthcare services (ABHS) to detect and diagnose diseases sooner and advance better patient outcomes. The FDA has over 600 AI-enabled medical devices, but the Center for Medicare & Medicaid Services (CMS) lacks standard or consistent methods for covering and paying for these products. This inconsistency will, in the long run, impact the adoption and patient access to medically appropriate AI technologies across the country.
The Health Tech Investment Act will assign all U.S. Food and Drug Administration (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.
Specifically, the Health Tech Investment Act would:
- Develop a formalized payment pathway for ABHS FDA-cleared medical devices
- Provide patients with access to innovative, AI-enabled clinical technology
- Provide manufacturers and providers with the certainty they need to invest in developing next-generation healthcare technologies and bringing them to market.
- Improve patient outcomes, providing resources for providers to meet ABHS standards of care
This legislation is endorsed by AdvaMed, Alliance for Aging Research, Brem Foundation to Defeat Breast Cancer, Focused Ultrasound Foundation, National Health Council, National Psoriasis Foundation, Patients Rising and Right Scan Right Time.
AdvaMed, the Medtech Association, commended Senators Mike Rounds (R-SD) and Martin Heinrich (D-NM) for introducing the Health Tech Investment Act (S. 1399).
Scott Whitaker, President & CEO of AdvaMed, said: “With AI-enabled medical technologies already making remarkable strides in patient care, and with even more incredible strides ahead of us, now is the time to establish a predictable reimbursement pathway. We thank Senators Rounds and Heinrich for their leadership and strongly urge Congress to pass this bipartisan legislation. It is critical to advancing the medical progress upon which patients depend and which is being driven by medtech.”
Peter J. Arduini, President & CEO of GE HealthCare, and Chair of AdvaMed’s Board of Directors, said: “Senator Rounds and Senator Heinrich have shown their deep knowledge of how AI is used in health care, and we greatly appreciate their leadership. The Health Tech Investment Act would help bring beneficial medical innovation to patient care by ensuring a clear payment pathway for algorithm-based health care services. We look forward to working with members of Congress to pass this important legislation and help bring these latest technologies to patients.”
Dave Pacitti, President, Siemens Medical Solutions USA, Head of the Americas, Siemens Healthineers, and Chair of the AdvaMed Medical Imaging Division Board of Directors, said: “I applaud Senator Rounds and Senator Heinrich for their leadership in establishing improved payment pathways for innovative AI software and devices, such as Algorithm-Based Healthcare Services, to increase adoption and expand access for all patients. Introduction of the Health Tech Investment Act is an important step towards expanding patient access to AI solutions in screening, diagnosing, and treating cancer, neurovascular, cardiovascular, and other diseases.”
Limited reimbursement for AI-enabled medical devices creates challenges for physicians and health systems looking to integrate FDA-authorized AI technologies into the care continuum. By establishing a consistent and stable payment pathway for ABHS, the Health Tech Investment Act will help expand opportunities for patients and physicians to benefit from AI-enabled medical devices.
In the previous Congress, the Senate and House Appropriations Committee and bipartisan Senate and House AI Task Forces each addressed the importance of establishing a payment pathway for AI-enabled medical devices in policy reports and roadmaps.