The Changing Characteristics of Technologies Covered by Medicare's New Technology Add-on Payment Program

Insurance payment for artificial intelligence technology: Methods used by a stroke artificial intelligence system and strategies to qualify for the new technology add-on payment

The first ever insurance reimbursement for an artificial intelligence (AI) system, which expedites triage of acute stroke, occurred in 2020 when the Centers for Medicare and Medicaid Services (CMS) granted approval for a New Technology Add-on Payment (NTAP). Key aspects of the AI system that led to its approval by the CMS included its unique mechanism of action, use of robotic process automation, and clear linkage of the system's output to clinical outcomes. The specific strategies employed encompass a first-case scenario of proving reimbursable value for improved stroke outcomes using AI. Given the rapid change in utilization of AI technology in stroke care, we describe the economic drivers of stroke AI systems in healthcare, focusing on concepts of reimbursement for value added by AI to the stroke care system. This report reviews (1) the successful approach used by the first NTAP-approved AI system, (2) economic variables in insurance reimbursement for AI, and (3) resultant strategies that may be utilized to facilitate qualification for NTAP reimbursement, which may be adopted by other AI systems used in stroke care.

New Medicare Technology Add-On Payment Could Be Used As A Market Support Mechanism To Accelerate Antibiotic Innovation

Despite growing antibiotic resistance, the clinical drug development pipeline for antibiotics has been sparse largely because of an unsustainable business model. We illustrate three models to accelerate antibiotic development, using Medicare new technology add-on payments as a market support mechanism. The first two models subsidize drug development for Medicare beneficiaries, and the third model applies a payment for every patient with a resistant infection to essentially create a funding pool. We found that the reimbursement required to sustain research and development would range from $637 to $121,365, depending on the payment model and the incidence of the resistant infection in question. With a $300 million public research subsidy, the payment for an antibiotic would drop to between $273 and $10,396 per course. Our market support model could increase the likelihood of attracting private investment for antibiotic development.