Medicare Expands Coverage for Radiology AI Solution
Medicare has taken a significant step forward in healthcare technology reimbursement by approving a new technology add-on payment for an advanced radiology AI solution. The approval, set under the finalized inpatient payment rule, marks a milestone for hospitals and seniors seeking faster and more accurate diagnostic imaging. The move centers on Aidoc’s CARE (Clinical AI Reasoning Engine) Multi-Triage CT Body tool, a radiology AI technology that analyzes computed tomography (CT) images to flag urgent conditions like appendicitis and bowel obstructions.
Key Details of the Medicare Payment Approval
Starting in 2027, Medicare will reimburse hospitals up to $137.53 per case for using the CARE CT Body Triage tool. This radiology AI solution, developed by Aidoc, leverages artificial intelligence to assist radiologists in efficiently identifying critical findings across a range of acute conditions. The decision is part of Medicare’s broader strategy to support innovative medical technologies and improve patient outcomes.
The Centers for Medicare & Medicaid Services (CMS) approved a total of 22 new products through its “alternative” payment pathway, all of which had previously received the Food and Drug Administration’s (FDA) breakthrough device designation. An additional 8 products secured reimbursement through the traditional payment pathway. In total, CMS estimates that $779 million will be allocated for inpatient cases involving emerging medical innovations in fiscal year 2027, with new technology add-on payments (NTAP) driving much of this investment.
Impact on Healthcare Providers and Patients
Elad Walach, CEO and co-founder of Aidoc, emphasized the importance of this change for health systems struggling with increased imaging demand and workforce shortages. “By creating a reimbursement pathway for eligible use of diagnostic AI, the NTAP program is helping patients get earlier access to this transformative new technology,” Walach stated. The radiology AI solution is expected to help hospitals make faster, more accurate diagnoses while managing operational challenges.
The American College of Radiology (ACR) noted that the new payment covers about 65% of the average cost of the technology. Hospitals utilizing the CARE CT Body Triage tool will identify eligible cases using the ICD-10-PCS procedure code XEZ5XKC, specifically for computer-aided triage and notification for imaging abnormalities in CT scans of the chest, abdomen, and pelvis.
Eligibility and Implementation Timeline
The CARE CT Body Triage device scans for a broad set of acute findings, offering hospitals a powerful diagnostic aid. Starting October 1, hospitals implementing this radiology AI solution will be eligible for add-on payments for three years, supporting the adoption of new technologies and expanding seniors’ access to innovative diagnostic tools. The FDA granted breakthrough designation to the device in September 2025 and provided 510(k) clearance in January.
Regulatory Pathways for Medical Innovation
Devices approved through Medicare’s traditional payment pathway must demonstrate substantial clinical improvement, while the alternative pathway waives this requirement for FDA-designated breakthrough technologies. However, CMS announced that beginning with applications for fiscal 2028, the alternative pathway will be repealed. All future applicants will need to meet the more stringent traditional requirements, ensuring new technologies offer clear clinical benefits over existing products.
CMS highlighted concerns about the limited evaluation process for the alternative pathway but decided to refine its approach for new payment applications. The agency aims to ensure that only technologies with proven diagnostic and treatment improvements for seniors receive additional payments. Similar standards will apply to other radiology AI solutions approved for payment on the hospital outpatient side.
Financial and Clinical Implications for Hospitals
Altogether, CMS is implementing a 2.3% payment update for inpatient care, increasing hospital payments by $2.1 billion for fiscal 2027. These changes reflect a broader commitment to supporting evidence-based decisions in healthcare technology adoption. According to the ACR, requiring substantial clinical improvement will better align spending with value, ultimately supporting providers in delivering the best data-driven care possible.
The approval of this radiology AI solution not only incentivizes hospitals to invest in cutting-edge diagnostic tools but also ensures seniors benefit from faster, more accurate diagnoses. As Medicare refines its payment policies, the integration of artificial intelligence in radiology stands to play an increasingly central role in modern healthcare.
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