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In both the Outpatient proposed rule and the Physician Fee Schedule proposed rule, CMS asks for public comment on how to price AI- and software-based services, including diagnostics. The comment periods run until September 12 & 14. I provide the relevant pages of Federal Register in a ZIP file, and provide links for submitting comments.
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Comment Fatigue?
You'll be excused for comment fatigue. (1) AMA seeks comments on how to code and class software-based or -augmented services (here). (2) Last spring, HHS ran a comment cycle on how it could de-regulate and reduce red tape in healthcare services (here). (3) About a week ago, HHS announced it was setting up a federal advisory committee to guide policy redesign for US healthcare (here). (4) There's an HHS effort where digital giants like Amazon and Apple promise to bring digital healthcare improvements to the U.S. (here, point #3).
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Comment on Pricing Physician Office and Hospital Outpatient AI
- I wrote a lengthy blog about this on July 16, so I'll focus on a shorter version today.
Summer Policymaking and Summer Comment
- Each summer, CMS releases hundreds of pages of policy and updates for the physician office environment ("PFS Rule") and hospital outpatient environment ("OPPS Rule.")
Key Pages in ZIP File PDFs
The key pages from both PFS and OPPS rule are in a cloud ZIP file here.
- Fed Reg July 16, 2025. PFS Rule, 90FR32506-7. CMS-1832-P.
- Comment on AI/Software pricing issues ("b.").
- Also of interest, on page 32374 ("d"), comment on how CMS may increasingly use hospital APC prices to set prices (RVUs) in the office setting.
- This builds on PAMA Section 220, 2014 (see also at SSA 1848(c)(2)(M).)
- Fed Reg July 17, 2025. OPPS Rule, 90FR 33565 (F). CMS-1834-P.
- Comment on AI/Software pricing issues (F.)
Comment Online
Comment on Content
For more nerdy detail and for a sample comment letter, click on my blog of July 16.
Comments should be based on specific questions issued by CMS (90FR32506, 90FR33565), see ZIP file above. Brief highlights of their questions to us include:
- PFS
- "More services include innovative technology...not well accounting for in our practice expense methodology."
- [AMA data does not provide...] insight into the direct costs associated with this technology.
- We consider most software, analysis, licensing fees to be indirect costs tied to hardware.
- What factors should we consider when paying for SaaS? How may CMS evaluate quality and efficacy of SaaS and AI technology? We welcome public comment.
- OPPS
- Prior to CY2018, SaaS was considered supportive and was packaged [bundled] into payment for the clinical service.
- Advanced imaging software for MRI was packaged into the payment for MRI.
- CMS has paid under New Technology APCs. We do not have a specific payment methodology for SaaS. These technologies evolve and diversify.
- Some say that...the lack of consistent policy can be an impediment to patient access...for services approved by FDA. We welcome public comment.
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CMS expects separate comment letters to be filed with OPPS and PFS. Should you want to write one consolidated letter, clearly label it as top as your comment on both rules and very clearly demarcate which part of your letter is for which.
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In addition to PAMA Section 220 legislative text on setting RVUs in new ways, see CMS discussion from November 2014 in PFS final rule CY2015, CMS-1612-FC, click here and search for "220."
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For a discussion of SaaS/AI via Radiology, here: Dogra S et al. (2024) Reimbursement in the age of generalist radiology artificial intelligence. NPJ Dig Med https://www.nature.com/articles/s41746-024-01352-w
Writing: We argue that generalist radiology artificial intelligence (GRAI) challenges current healthcare reimbursement frameworks. Unlike narrow AI tools, GRAI’s multi-task capabilities render existing pathways inadequate.
