STAT+: What Medicare incentives for AI-based devices mean for tech companies — and hospitals

For hospitals, the promise of artificial intelligence is financial as much as clinical. A hospital might deploy an AI device because it promises to throw up an alert that could save a patient’s life — but the technology is far more likely to stick if it proves it can drive down costs. 

Convincing hospitals and health systems that a new technology will provide that return on investment is tricky, though. So some AI startups have benefited from a temporary sweetener that helps customers get on board: Certain new technologies can apply to get add-on payments from Medicare for two or three years after they come to market. The tax-dollar-funded payments are meant as an incentive to help get new, expensive medical technologies to patients.

If a hospital thinks, “‘Oh, you’re not 100% sure you have the money, or you don’t necessarily believe 100% of the assumptions in the ROI,’ then you know what? You have this safety net, at least for the next few years,” said Tom Valent, chief business officer at Aidoc. 

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