Health Tech Investment Act
The Health Tech Investment Act would revise Medicare payment rules to ensure algorithm-based healthcare services receive appropriate reimbursement under the hospital outpatient payment system (OPPS). It creates a new special rule under the NTAP (New Technology Ambulatory Payment Classification) framework for algorithm-based services, requiring cost-based NTAP determinations based on manufacturer-provided cost data and extending protections to keep such services in NTAP for at least five years before any reclassification. The bill also broadens the criteria for NTAP eligibility to better capture distinct, technology-based procedures that involve AI or similar software. Additionally, it codifies how software-as-a-service (SaaS) payments should be treated under OPPS, aligning with a prior CMS rule. In short, the bill aims to improve Medicare payment coverage for AI-driven and other software-enabled medical services by tying NTAP decisions more closely to actual costs, ensuring longer protection in NTAP, and formalizing SaaS payments under the OPPS framework.
Key Points
- 1Special NTAP rule for algorithm-based healthcare services: Starting in 2026, algorithm-based services assigned to NTAP (either new entries or those under NTAP for less than 5 years) must have their NTAP classification based on the manufacturer’s cost data (including invoice prices, subscriptions, staff, overhead, etc.), with adjustments as needed, and may not be removed from NTAP until adequate claims data exist to support reclassification (not before at least 5 years of NTAP payment).
- 2Eligibility and classification adjustments: The Secretary must adjust the NTAP application process and criteria so that algorithm-based services that meet eligibility remain eligible, including those that are distinct new procedures with a beginning, middle, and end, or satisfy subsequent eligibility requirements for NTAP.
- 3Definition of algorithm-based healthcare service: The bill defines such a service as one delivered via FDA-cleared/approved devices using AI, machine learning, or similar software to generate clinical outputs or conclusions used by a physician in screening, detection, diagnosis, or treatment, with the possibility for the Secretary to expand this definition in consultation with appropriate organizations.
- 4Timelines: The new NTAP provisions apply to services furnished on or after January 1, 2026.
- 5Software as a Service (SaaS) payments under OPPS: Effective for services on/after January 1, 2023, the Act requires applying the OPPS SaaS payment policy described in a 2022 CMS final rule, ensuring SaaS-based algorithm services receive appropriate outpatient payment treatment.