The demand for AI cancer screening programs is increasing, but you may need to cover the cost yourself.

• Over the past five years, the FDA has approved approximately 600 radiology AI and machine learning programs and devices, yet the majority of these aren't reimbursed by insurance.
• New programs for reimbursement are being approached with caution by medical associations and regulators.
• Avenda Health's prostate cancer screening technology has been granted a provisional code, but its CEO fears the sluggish process of obtaining insurance reimbursement may hinder the adoption of the technology.
• RadNet's AI-enhanced breast cancer screening program is accessible to patients who pay a cash fee, as the provider does not require a billing code.

Artificial intelligence for cancer screening has taken off.

New technology programs are not typically covered by Medicare or private insurers, which presents challenges for companies trying to increase adoption and for patients who could benefit from the new technology.

Avenda Health CEO Brittany Berry-Pusey stated that it is quite a challenge for medical devices to be reimbursed, as it can take up to seven years for a product that has been approved by the FDA to receive reimbursement.

The Food and Drug Administration has authorized 882 AI and machine learning-enabled devices and programs, with nearly 600 of them being radiology AI applications approved in the last five years. However, most of these devices do not yet have billing codes that would enable them to receive reimbursement and prevent patients from paying out of pocket.

Although some tools have shown potential in enhancing cancer diagnosis and treatment, further data is required to establish their superiority over traditional screening methods before major insurers will agree to cover them.

Before insurers cover AI tools, a complex process must occur, as demonstrated by one of Avenda's products.

The Unfold AI prostate cancer platform of the company helps urologists detect more cancer cells than traditional MRI screenings. It can aid in selecting the best treatment to minimize the risk of prostate cancer surgery side effects such as incontinence and impotence.

Last year, the FDA approved the program for medical decision support, and the American Medical Association designated a provisional billing code for it, which most AI radiology products have not yet received.

Currently, Avenda is striving to secure Medicare and insurer coverage, which may take an extended period in many instances.

Berry-Pusey stated, "Our older patient population may find it challenging to pay out of pocket if there's no payment, as it can be difficult for them to afford the costs."

Hurdles to reimbursement

The American Medical Association, which assigns CPT codes for reimbursement, issued guidelines for creating AI CPT codes last fall. The group suggested that different medical specialties should collaborate to establish standards for their specific fields.

Dr. William Thorwarth, CEO of the American College of Radiology, stated that the lack of reimbursement is hindering the adoption of new AI programs for cancer screening, particularly for smaller hospitals and physician practices. However, in a letter to a congressional committee evaluating the use of AI in healthcare, he advised against rushing the implementation.

Thorwarth stated that AI reimbursement is intricate and creating billing codes for each approved AI tool is challenging. He also pointed out that it is unclear whether the current AI platforms are benefiting patients or the healthcare system.

The Centers for Medicare & Medicaid Services and private health insurers have expressed similar caution. A spokesperson for the Centers for Medicare & Medicaid Services told CNBC that the agency takes CPT codes into account for reimbursement and "continually assesses opportunities to leverage new, innovative strategies and technologies safely and responsibly, including Artificial Intelligence."

Since the late 1990s, doctors have expressed caution about computer-aided mammography due to concerns about false positives and unnecessary biopsies.

Dr. Rodrigo Cerda, the Chief Medical Officer of Independence Blue Cross, stated that the effectiveness of the latest programs is yet to be determined.

Cerda stated that the evidence does not fully support the claim that it has a positive impact on our members and may introduce false positives or increase confidence in false negatives.

Charging patients out of pocket

Radiology providers have started charging patients for their proprietary Enhanced Breast Cancer Detection AI screening, which was launched in 2022, as insurance reimbursement is not available. RadNet has published data indicating the tool helps to improve cancer detection.

The company reduced the price of the test from $59 to $40, and its AI digital health revenue more than doubled in the first quarter from a year ago. Additionally, patient adoption of AI screening increased from approximately 25% to 39% of mammogram patients.

The radiology industry's experience with digital breast Tomosynthesis, or 3D mammography, is comparable to the process of AI screening in the radiology industry. Initially, 3D mammography was approved by the FDA in 2011 and required an out-of-pocket fee. However, by the end of the decade, it was widely covered by insurers.

Can we eventually persuade insurers to take action, and do you think promoting the benefits of detecting more cancers will help convince them, according to Dr. Greg Sorensen, RadNet's chief science officer?

RadNet has enrolled an employer in New Jersey to cover breast cancer scans for its workers, as stated by Sorensen.

An AI-enhanced prostate MRI screening will soon be launched by the company for $250, but this cost may hinder adoption and access for patients who cannot afford it.

Concerns about access

An AI prostate cancer screening made a significant difference in UCLA neurology professor Josh Trachtenberg's care, and he was willing to pay for it.

Last year, when Trachtenburg was diagnosed with prostate cancer, several doctors advised him to undergo a prostate removal surgery, which would have resulted in incontinence and impotence issues.

The urologist at the UCLA medical school used Avenda Health's Unfold AI program to accurately measure the extent of his tumor, enabling the surgeon to remove cancer cells while preserving healthy tissue.

Trachtenberg fears that patients who cannot afford additional expenses for specific AI tools may suffer from inferior results.

He stated that most men who aren't medical school faculty are subjected to a meat grinder procedure because that's what insurance covers and it's the standard practice.

Berry-Pusey of Avenda Health is concerned that patients may miss out on new technologies due to the uncertainty of reimbursement, which could hinder funding for innovation.

To ensure our survival as a startup, it is crucial for us to have a clear path to revenue and attract investors.

Despite the challenges in the payment sector, investors are still supporting health-care AI developers. Alex Morgan, a partner at Khosla Ventures, is optimistic about the industry and recently participated in a significant funding round for a radiology AI company.

"To achieve efficiency gains, it is crucial to provide differentiated, powerful outcomes, rather than simply relying on a human to perform various activities and then adding AI, according to Morgan."

In the end, the technology that enhances patient care and outcomes will prevail, as he stated.