The Medicare Machine Cranks Out Cash for Radiology AI: A $779 Million Bonanza for Inpatient Care
In a move that's bound to send shockwaves through the healthcare industry, Medicare has approved a slew of new technology add-on payments, with a whopping $137.53 per case in 2027 earmarked for Aidoc's BriefCase-Triage radiology AI solution. The CARE (Clinical AI Reasoning Engine) Multi-Triage CT Body tool uses artificial intelligence to analyze computed tomography images, flagging potentially urgent findings like appendicitis or bowel obstruction.
This is just the tip of the iceberg, as Medicare has approved a total of 22 new products that have also received the Food and Drug Administration's breakthrough device designation through the "alternative" payment pathway. An additional eight scored reimbursement through Medicare's traditional payment pathway. The net result? A $779 million bonanza for inpatient care in fiscal 2027, with the lion's share going to new technology add-on payments.
Health systems are under increasing pressure to get patients accurate diagnoses sooner, all while managing growing imaging demand and persistent workforce shortages, according to Elad Walach, CEO and co-founder of Aidoc. By creating a reimbursement pathway for eligible use of diagnostic AI, the NTAP program is helping patients get earlier access to this transformative new technology.
But here's the thing: the CARE CT Body Triage payment figure represents about 65% of the average cost of the technology, according to the American College of Radiology. Cases involving use of the AI product that are eligible for add-on payments will be identified by ICD-10-PCS procedure code XEZ5XKC (computer-aided triage and notification for imaging abnormalities in computed tomography of chest, abdomen and pelvis, new technology group 12), ACR added.
Aidoc's CT Body Triage device scans for a broad set of acute findings. Starting October 1, hospitals using it will be eligible for add-on payments spanning the next three years – aimed at helping offset the cost of adopting new technologies, granting seniors greater access to emerging diagnostic and treatment tools.
The FDA previously granted CT Body Triage its breakthrough designation in September 2025 and 501k clearance in January. Devices approved through the "traditional" payment pathway require proof of substantial clinical improvement, while the "alternative" waives this requirement for eligible FDA-designated breakthrough technologies.
In the final rule, CMS said it is repealing the alternative pathway for new payments beginning with applications received for fiscal 2028. Going forward from then, it will require all applicants to meet the more stringent traditional rules.
In the initial proposed rule, CMS expressed concerns with the limited evaluation process for alternative applications, ACR reported. After further consideration, the agency believes it was best to refine its approach to granting payments, ensuring that reimbursed technologies are not substantially similar to existing products and are able to improve diagnosis and treatment for seniors.
CMS believes this requirement will better align spending and value and ultimately support providers in delivering the best, data-driven care possible. By requiring all technologies to demonstrate that they offer a substantial clinical improvement as part of its evaluation process, the agency believes it will be better able to make evidence-based decisions on which technologies should receive these additional payments.
The Medicare machine is always cranking out cash for new technologies, but this one's got some serious implications. With a 2.3% payment update for treating inpatients and an increase of $2.1 billion for fiscal 2027, hospitals are going to be scrambling to get on board with these new AI-powered radiology solutions.
It's only the beginning, as Medicare is doing the same for other radiology AI devices that earn payment approval on the hospital outpatient side. The writing's on the wall – healthcare is going digital, and it's going to change everything.
Written by: Jony Spark | The Citizen Edition
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