S6 Ep5: The Reading Room Podcast: Assessing the Current Landscape of AI and Reimbursement in Radiology, Part 1

While there are hundreds of FDA cleared algorithms in radiology, only a small number have CPT category one codes.

From your perspective, what are key contributing factors for this?

So I think probably for the purpose of this conversation, it helps to take one step back and explain the different ways that Medicare pays for things.

So there's three main payment policies or programs that Medicare uses.

One of them is the Category 1 CPT system in the physician fee schedule.

So you can get a Category 1 CPT code that gets a payment assigned at the RUC.

And that's how physicians get payment and physician offices get payment.

So that's one category.

There's another one called the hospital outpatient prospective payment system, which is how Medicare pays hospitals and facilities.

Those are technical only components.

So you could have codes that get paid in that system that don't get paid with physician fee schedule category one CPT codes.

And then there's a third called the inpatient prospective payments system, which is how Medicare pays for inpatients.

All of those three have different ways that CMS can reimburse AI tools and any kind of services, including AI.

And there are examples in each one of those that CMS pays for different types of healthcare services.

Particularly in the physician fee schedule, there are very few category one CPT codes for AI technology.

there's more in the hops and hospital patient perspective payment system.

And there's a handful in the inpatient system as well.

But when we talk specifically about the position fee schedule, which is how doctors get paid for the work, the position work they do, and they get paid for the technical component in their offices.

There's not a lot of them.

I think the main reason for that is probably that a lot of the AI algorithms we have now are ways that we can detect findings or triage findings so that it duplicates the payments that already exist in the CPT system.

So if you have an algorithm that pays for finding, or I'm sorry, that finds lung nodules, well, CMS already pays us to find lung nodules in the code that already exists for a chest CT, right? So they're not going to make a new CPT code that's going to give us more money for using a software that's going to help us find the lung nodules.

Even if it does it faster or better, they generally do not like duplication of work.

So they're not going to make a second code for that.

So specifically for those detection and triage algorithms, the CPT system in general doesn't work well for those types of things, for that duplication of work.

rationale.