The U.S. Food and Drug Administration has cleared nearly 1,000 AI-enabled devices, but Medicare lacks a standard, consistent method for covering these products. Digital health companies have long struggled to obtain a clear reimbursement pathway, which has meant that promising technologies that had successfully obtained US Food and Drug Administration (FDA) authorization fail to reach patients.

The Health Tech Investment Act would change this by:

• Defining Algorithm-Based Health Solutions (ABHS) as a distinct, eligible service category under Medicare 
• Requiring the Centers for Medicare & Medicaid Services (CMS) to place qualifying AI services into a “New Technology” Ambulatory Payment Classification (APC) 
• Establishing payments based on manufacturer-submitted cost data, including expenses like subscription fees, invoices, clinical staffing, and overhead 
• Guaranteeing at least five years of separate reimbursement before CMS may transition a service into standard classifications
• Allowing reimbursement for AI services even when performed concurrently with or adjunctive to other medical procedures

This structure replaces a reactive, piecemeal reimbursement system for AI-enabled medical devices with a streamlined, consistent, and innovation-friendly system.