Medicare Approves Additional Payment for AI Diagnostic Tool
Medicare will provide up to $137.53 per case in 2027 for Aidoc's BriefCase-Triage, an AI tool that analyzes CT images for urgent conditions. The New Technology Add-On Payment (NTAP) designation, approved by CMS, allows hospitals to receive supplemental payments starting October 1, 2026, for three years. This marks the first NTAP designation for an AI-enabled diagnostic tool.
The NTAP program functions as a financial bridge, offsetting the added expense hospitals absorb when adopting novel technologies before they become standard practice. To qualify, a device must meet three benchmarks: novelty, cost exceeding typical diagnosis-related group payments, and demonstrable clinical advantage over existing approaches. The reimbursement formula caps the add-on at 65% of either the technology's cost or the excess beyond standard MS-DRG payment, whichever is lower.
Aidoc's tool processes chest, abdomen, and pelvic CT scans, flagging time-sensitive abnormalities like appendicitis or bowel obstruction. Medicare assigned procedure code XEZ5XKC to identify qualifying cases, and the three-year supplemental payment window begins October 1, 2026. Hospitals must verify eligibility and align their coding practices with CMS requirements before seeking reimbursement.
This designation could accelerate AI adoption in hospital radiology departments, as the financial cushion reduces the risk of investing in unproven diagnostic tools. Patients may benefit from faster identification of urgent conditions, potentially improving outcomes for time-sensitive emergencies. However, the modest per-case payment may limit uptake to larger hospitals with robust billing infrastructure, and the requirement for precise coding could create administrative burdens. The precedent may also encourage other AI developers to pursue similar designations, potentially reshaping how diagnostic software is evaluated and reimbursed.