Biotech
Thursday, May 30th, 2024 4:32 pm EDT
Key Points
- Coverage Challenges: Despite significant advancements in artificial intelligence (AI) for cancer screening, many new programs lack coverage by Medicare or private insurers, creating hurdles for both companies aiming to increase adoption and patients who could benefit from the technology.
- Reimbursement Delays: The process of getting reimbursement for AI medical devices is lengthy, with up to seven years required post-FDA approval. Most AI radiology products lack billing codes necessary for reimbursement, resulting in patients having to pay out-of-pocket for screening services.
- Innovation vs. Reimbursement: While AI tools like Avenda Health’s Unfold AI prostate cancer platform have shown promise, securing coverage from Medicare and insurers remains a challenge. The lack of reimbursement may hinder funding for innovation, potentially limiting patient access to new technologies.
Artificial intelligence (AI) for cancer screening has seen rapid advancements, but many new AI programs are not covered by Medicare or private insurers, posing significant challenges for companies aiming to increase adoption and for patients who could benefit from this technology. According to Brittany Berry-Pusey, CEO of AI screening startup Avenda Health, it can take up to seven years for a medical device to receive reimbursement after FDA approval. As AI capabilities grow, the FDA has authorized 882 AI and machine learning-enabled devices, with nearly 600 of these being radiology AI applications approved in the last five years. However, most lack billing codes for reimbursement, requiring patients to pay out-of-pocket.
For instance, Avenda’s Unfold AI prostate cancer platform helps urologists detect more cancer cells than traditional MRI screenings and assists in determining the best treatment to minimize side effects like incontinence and impotence. Although the FDA approved the program for medical decision support last year, obtaining a provisional billing code from the American Medical Association, Avenda is still working to get Medicare and insurers to cover it, which can take years. Berry-Pusey highlights that without reimbursement, patients, especially the older demographic, face financial challenges.
The American Medical Association has issued guidelines for establishing AI Current Procedural Terminology (CPT) codes, but the lack of reimbursement is hindering the adoption of AI programs, especially in smaller hospitals and physician practices. Dr. William Thorwarth, CEO of the American College of Radiology, noted the complexity of AI reimbursement and the challenge of establishing billing codes for each approved AI tool, expressing uncertainty about their value to patients and the health system.
Medicare and private insurers share this caution. The Centers for Medicare & Medicaid Services (CMS) continually assess opportunities to leverage new technologies safely, including AI. Past experiences with computer-aided mammography, which led to false positives and unnecessary biopsies, contribute to their cautious approach. Independence Blue Cross Chief Medical Officer Dr. Rodrigo Cerda indicated that evidence on the effectiveness of new AI programs still needs to meet the bar to demonstrate clear benefits and avoid risks like false positives or false negatives.
Without insurance reimbursement, companies like RadNet have resorted to charging patients fees for AI screenings. RadNet’s Enhanced Breast Cancer Detection AI screening, launched in 2022, had its price reduced from $59 to $40, leading to increased patient adoption. RadNet’s executives draw parallels with digital breast Tomosynthesis, initially offered for an out-of-pocket fee before gaining insurer coverage. RadNet plans to launch an AI-enhanced prostate MRI screening for $250, which may limit accessibility for some patients.
Concerns about access remain. UCLA neurology professor Josh Trachtenberg, who paid for an AI prostate cancer screening, believes it significantly improved his care by allowing more precise tumor measurement and less invasive surgery. Trachtenberg worries that patients unable to afford AI tools may face poorer outcomes. Berry-Pusey fears that uncertainty in reimbursement could stymie funding for innovation, crucial for startups like Avenda Health to survive.
Despite these hurdles, investors remain optimistic about healthcare AI. Alex Morgan, a partner at Khosla Ventures, sees potential in AI improving quality of care and patient outcomes. He emphasizes that technology providing differentiated, powerful outcomes will ultimately succeed in gaining acceptance and reimbursement.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/30/ai-cancer-screening-is-booming-most-not-covered-by-insurance-.html
