AI cancer screening programs are booming, but you'll probably should pay for them yourself

AI in healthcare: who pays for it?

Artificial intelligence for cancer prevention has gained momentum.

However, most of those recent programs usually are not covered by Medicare or private medical health insurance, creating headwinds for firms seeking to increase adoption and for patients who may gain advantage from the brand new technology.

“Traditionally, it takes up to seven years for medical devices after a product is approved by the FDA to be reimbursed, so that’s quite a challenge,” said Brittany Berry-Pusey, co-founder and COO of the AI ​​screening startup Avenda Health.

As AI capabilities proceed to grow, the Food and Drug Administration has approved 882 AI and machine learning-enabled devices and programs. Nearly 600 of those are approved AI applications for radiology up to now five years. Most don’t yet have billing codes that will enable reimbursement and forestall patients from having to pay out of pocket.

While some tools have shown promise in improving diagnosis and treatment of cancer patients, more data could also be needed to find out whether or not they are simpler than traditional screening before major insurers are willing to cover their costs.

One of Avenda’s products illustrates the complex process that must happen before insurers cover AI tools.

The company's Unfold AI platform for prostate cancer can assist urologists find more cancer cells than traditional MRI screenings and can assist determine the most effective treatment to scale back the chance of unwanted side effects reminiscent of incontinence and impotence from prostate cancer surgery.

The FDA approved the medical decision support program last 12 months. Just as importantly, the American Medical Association has assigned it an interim billing code—which most AI radiology products haven’t yet received.

Avenda is now attempting to get Medicare and insurers to cover the prices, which in lots of cases can take years.

“If there is no payment, it means patients have to pay out of pocket, which can be challenging … especially for our patients. This is an older patient population,” Berry-Pusey said.

Hurdles to reimbursement

The American Medical Association, the medical skilled organization that issues the Current Procedural Terminology codes that enable reimbursement, has Guidelines for establishing AI-CPT codes last fall. The group said different medical specialties must have a say in what standards should apply of their fields.

The lack of reimbursement is hindering the adoption of recent AI programs for cancer screening, especially in smaller hospitals and physician practices, said Dr. William Thorwarth, CEO of the American College of Radiology, which represents 1000’s of execs in the sector. But in a letter Before a congressional committee investigating using AI in healthcare, he warned against moving too quickly.

Thorwarth wrote that reimbursement for AI costs is complex and establishing billing codes for every approved AI tool is “problematic.” He added that it’s “unclear” whether the AI ​​platforms currently covered “provide value to patients or the healthcare system.”

Medicare and personal health insurers have expressed similar caution. A spokesperson for the Centers for Medicare & Medicaid Services told CNBC that the agency considers CPT codes when making reimbursements and “continually evaluates opportunities to safely and responsibly deploy new, innovative strategies and technologies, including artificial intelligence.”

Some of this caution may stem from previous experience with computer-assisted mammography within the late Nineties. Doctors have since said it led to false positives and unnecessary biopsies.

Dr. Rodrigo Cerda, chief medical officer of Independence Blue Cross, said the effectiveness of the newest programs has not yet been determined.

“The evidence isn’t yet quite sufficient to say that it clearly provides a positive profit to our members and doesn’t pose other risks that may lead to false-positive results or exacerbate the false-negative results,” Cerda said.

Patients have to pay out of their own pocket

Without reimbursement by insurance, radiology providers RadNet has started charging patients for its proprietary AI screening tool, Enhanced Breast Cancer Detection, which launched in 2022. RadNet has released data suggesting the tool helps improve cancer detection.

The company recently reduced the price of the test from $59 to $40. It said its revenue from AI in digital healthcare more than doubled year-on-year in the first quarter and patient adoption AI screening increased from around 25% to 39% of mammography patients.

RadNet executives compare the AI ​​screening process to the radiology industry's experience with digital breast tomosynthesis, known as 3D mammography. The FDA approved the procedure in 2011 and women were initially offered screening for a co-payment. However, by the end of the decade, it was largely covered by health insurance.

The query is, can we finally [insurers] And I feel the acceptance and value creation to find more cancers will ultimately persuade them,” said Dr. Greg Sorensen, RadNet's chief scientific officer.

Sorensen said RadNet has recruited an employer in New Jersey that will now cover the cost of breast cancer screenings for its employees.

The company will also will soon launch an AI-powered prostate MRI screening for $250. But that price could pose a major hurdle to adoption — and access for patients who can't afford it.

Concerns about access

Josh Trachtenberg, a neurology professor at UCLA, was willing to pay for AI prostate cancer screening because he believes it made a huge difference to his own treatment.

Trachtenburg says when he was diagnosed with prostate cancer Last year, several doctors told him that his prostate would need to be removed, a procedure that would have caused incontinence and impotence problems.

He turned to a urologist at UCLA School of Medicine who used Avenda Health's AI program Unfold. The program was able to more accurately measure the extent of his tumor, allowing doctors to get to the cancer cells during surgery while preserving healthy tissue.

Trachtenberg fears that patients who cannot afford the additional costs of certain AI tools will pay the price with worse outcomes.

“I feel most men who usually are not teaching in medical school are only put through the meat grinder since it's covered by insurance and that's the usual procedure,” he said.

Berry-Pusey of Avenda Health fears that patients may be denied access to new technologies altogether because uncertainty about reimbursement could hinder funding for innovation.

“As a startup, we’re at all times searching for investors, so ensuring there’s a transparent path to more revenue is very important for our survival,” she said.

Despite the payment hurdles, investors are backing developers of AI in healthcare. Alex Morgan, partner at Khosla Ventures, is optimistic about the sector and recently participated in a large funding round for an AI company in radiology.

“If you simply have a human do a set of tasks after which activate AI, you're not going to get efficiency gains,” Morgan said, adding that the key to getting paid is “delivering differentiated, high-performance results.”

He said that ultimately, technology that improves the standard of care and patient outcomes will prevail.

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