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MCDA Submits Comment and Report on PFS Software as a Medical Device (SaMD) Reimbursement

Today, MCDA submitted our comment letter and deep-dive report responding to CMS's 2022 Physician Fee Schedule Proposed Rule solicitation of input on artificial intelligence (and more broadly "Software as a Medical Device" or "SaMD") coverage and payment policy.

Over the last few years, CMS has been working to appropriately reimburse an increasing (but still small) number of services in which advanced clinical software is integral to the services. To date, CMS has explored classifying SaMD inputs as indirect costs, effectively zeroing those costs out from the PFS methodology; this approach has been met with near-universal disagreement in public comments, leading CMS to adopt a series of "proxy" workarounds, essentially setting payment rates for services using SaMD equal to alternative services whose rates are close to what the SaMD code would have been paid if CMS had included the SaMD input. This stopgap measure is reasonable only in the short term, and CMS understands that they must establish a formal, global policy.

PFS SaMD services are and will continue to increase over time. As well, CMS's policy challenge parallels a reality that the Food and Drug Administration (FDA) has integrated into their work: certain medical software products have matured from being subordinate tools that support traditional medical devices or human labor to being legitimate medical devices in their own right. Indeed, the 21st Century Cures Act recognized this fact under law. Software as CMS has traditionally thought about it has evolved, and now CMS must figure out how to appropriately reimburse SaMD under the PFS given this reality.

MCDA's report explores the complex and expansive policy issues surrounding SaMD in depth, and our comment presents our summary recommendations and responses to CMS's solicitation for public input. As well as analyzing the broad policy issues, we present analyses of the specific codes at issue in the rule.

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For questions and comments on our work, please feel free to contact James Muller at


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