CMS has proposed a new way to recognize and potentially pay for certain software-based clinical services (always start with the fact sheet – far more readable than the full text). This may matter in radiology, but it does not mean every AI tool will suddenly be reimbursed by Medicare.
The proposal calls these tools Software as a Medical Service. Examples include software that extracts useful information from medical images, such as heart blood-flow analysis, fracture-risk scores, or brain MRI comparisons. CMS would give some of these services their own payment category while it learns more about how they are used.
Medicare is beginning to acknowledge that some software can provide clinical information beyond a simple workflow aid, and it augments rather than replace physician work (Radiologists have been saying this for a while, and other -ologies expected to follow as product lines expand). Still, the proposal is temporary and limited. Many AI tools would not qualify for separate payment, and payment will depend on appropriate ordering, documentation, billing, and medical necessity.
Clear language matters – CMS differentiates between assistive, augmentative, and autonomous. Software that helps a radiologist work faster (assistive) is different from software that provides new, clinically useful measurements (augmentative). Both differ from a system that makes a diagnosis without a clinician (autonomous). Administrative tools such as scheduling or drafting messages can be useful, but they are not diagnostic services.
The bigger challenge is workflow. Buying or building a tool is only the beginning. All of it involve some form of cost. Hospitals must integrate it into their systems, review privacy and security, train staff, check its performance, document its use, bill correctly, manage denials, and show that it improves care. On the flip side, a billing code alone does not guarantee revenue.
For radiology leaders, the practical next step is to take inventory: Which software tools are already in use? What do they add to patient care? Are eligible services being documented and billed correctly? What do they cost, and what clinical decisions do they improve?
CMS’s proposal is a meaningful step, but not a windfall. The opportunity is to identify the software services that provide distinct value, and build reliable workflows around them.