BIOBRIEF
The July 14 proposed rule asks the public how to pay for AI software used in diagnosis and treatment, and would end the practice of outsourcing remote patient monitoring to outside vendors.
Medicare is opening a public comment on how to set up a payment lane for clinical AI: the kind of software that helps clinicians read scans and flag sepsis in routine care. The CY 2027 Medicare Physician Fee Schedule proposed rule, issued July 14 and published in the Federal Register two days later, invites comment on a new "Software-as-a-Medical-Service" payment path and a separate HCPCS code set for AI clinical services.
CMS is not writing checks for clinical-AI software yet. It is asking vendors and the clinicians who would use the tools how payment should be structured, with an effective date on or after January 1, 2027 if the rule is finalized.
The same rule tightens remote patient monitoring and remote therapeutic monitoring, the two code families where Medicare has paid for connected-device care since 2019. Both would have to be furnished by direct employees of the billing practitioner, with a face-to-face initiating visit and patient consent. RTM would also pick up an established-patient requirement.
CMS cites HHS Office of Inspector General audits that found roughly 43% of Medicare RPM enrollees in 2022 did not get all three required components, with third-party companies "cold calling" beneficiaries to enroll them. The qualifying-APM conversion factor would be $33.17; the non-qualifying $32.84, both below 2026 because a one-time 2.50% statutory bump is expiring.
The comment period is open, and CMS will weigh vendor and clinician input before issuing the final rule, expected this fall.