Insurance Coverage for AI

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The U.S. government’s largest national health insurance plan will pay for hospital use of a deep learning model, building momentum for AI to become an integral part of the doctor’s toolkit.
What’s new: The Centers for Medicare and Medicaid Services agreed to reimburse hospitals for use of Viz LVO, a smartphone app that spots signs of stroke so patients can receive time-critical treatment. It is the first AI software to be covered under Medicare’s New Technology Add-on Payment program, which covers the cost of certain breakthrough technologies. The government will pay hospitals up to $1,040 per patient for each use.
How it works: Elderly and otherwise disadvantaged U.S. citizens are eligible for government health insurance called Medicare. The agency that oversees the program added the app, from startup Viz.ai, to a list of new technologies that are approved for reimbursement.

  • Viz LVO classifies blocked blood vessels in CT scans of the brain with 90 percent accuracy. When it identifies a potential stroke victim, it automatically notifies a specialist to review the case, bypassing the usual radiologist review.
  • The model screens out roughly 90 percent of scans, dramatically reducing the number that require a specialist’s attention.
  • The app has been shown to accelerate diagnosis and improve patient outcomes.

Behind the news: U.S. Food and Drug Administration approved Viz LVO in 2018. The agency has approved the efficacy and safety of 64 AI-powered medical devices and algorithms, according to a recent study.
Why it matters: In America, healthcare is a business, and hospitals hesitate to use even the most promising new technologies unless they know they will be paid. Medicare’s decision covers the app in a hospital setting without requiring patients to contribute. According to one analysis, the reimbursement is high enough for hospitals to pay for the technology assuming around 25 patients annually use it. This assures that Viz LVO will be used when doctors deem it helpful and could pave the way for more medical tools based on machine learning.
We’re thinking: The primary duty of the healthcare system is to ensure patient wellbeing. AI is gaining acceptance in medicine, but widespread adoption depends on compensating hospitals for their work.

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