Cancer screening using AI is booming, and most of it is not covered by insurance

Artificial intelligence has taken off for cancer screening.

However, most of these new programs are not covered by Medicare or private insurance companies, creating headwinds for companies looking to boost adoption and for patients who could benefit from the new technology.

“Traditionally, for medical devices, it takes up to seven years after getting a product approved by the FDA,” said Brittany Berry Posey, CEO of AI screening startup Avenda Health. “So, this is “A big challenge.”

As AI capabilities accelerate, the FDA has licensed 882 devices and software that support AI and machine learning. Nearly 600 of these were AI applications in radiology approved in the past five years. Most of them do not yet have billing codes that would allow them to obtain reimbursement and prevent patients from paying out of pocket.

While some tools have shown promising early results in helping improve diagnosis and care for cancer patients, more data may be needed to determine whether they are more effective than traditional screening before major insurance companies are willing to cover them.

An Avenda product demonstrates the complex process that must go through before insurance companies will cover AI tools.

The company's Unfold AI prostate cancer platform helps urologists find more cancer cells than traditional MRI scans. It can help determine the best treatment to reduce the risk of side effects of prostate cancer surgery such as urinary incontinence and impotence.

The US Food and Drug Administration (FDA) approved the medical decision support software last year. Just as importantly, the American Medical Association has assigned a temporary billing code to it — something most AI-driven radiology products have yet to receive.

Now, Avenda is working to get Medicare and insurance companies to provide coverage, which in many cases can take years.

“If there's no payment, that means patients have to pay out of pocket, which can be a challenge… especially for our patients. This is an older group of patients,” Berry Posey said.

The American Medical Association, the medical professional organization that assigns Current Procedural Terminology codes that authorize reimbursement, issued guidelines for creating AI CPT codes last fall. The group said different medical specialties should help define standards for use in their fields.

Lack of reimbursement is hindering the adoption of new AI cancer screening software, especially for small hospitals and physician practices, said Dr. William Thorwarth, CEO of the American College of Radiology, which represents thousands of professionals in the field. However, in a letter to a congressional committee evaluating the use of AI in health care, he cautioned against moving too quickly.

Thorwarth wrote that reimbursement for AI is complex and that creating billing codes for each approved AI tool is “problematic.” He added that it was “unclear” whether the AI ​​platforms currently included “add value for patients or the health system.”

Medicare 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 when paying and “continuously evaluates opportunities to safely and responsibly leverage new and innovative strategies and technologies, including artificial intelligence.”

Part of this caution may stem from previous experience with computer-assisted mammography in the late 1990s. Doctors have since said this led to false positives and unnecessary biopsies.

Dr. Rodrigo Cerda, chief medical officer at the independent Blue Cross, said the verdict was still out on the effectiveness of the latest programs.

“The evidence didn't quite meet the criteria that it makes a clearly positive difference for our members and doesn't present other risks that could be false positives or kind of give confidence to false negatives,” Cerda said.

Without insurance reimbursement, radiology provider Radnet It has resorted to charging patients for its AI-enhanced breast cancer screening, which it launched in 2022. RadNet has published data suggesting the tool helps improve cancer detection.

The company recently reduced the price of the test from $59 to $40. It said its AI-based digital health revenues more than doubled in the first quarter compared to last year, and patient reliance on AI screening increased from about 25% to 39% of mammogram patients.

RadNet executives compare the process with AI screening to the radiology industry's experience with digital breast tomosynthesis, known as 3D mammography. It was approved by the US Food and Drug Administration in 2011, and women were initially offered the test for an out-of-pocket fee. By the end of the decade, it was widely covered by insurance companies.

“The question is, can we ultimately get (insurers) to step up to make this happen? And I think driving adoption and value propositions to discover more cancer, I think will ultimately convince them,” said Dr. Greg Sorensen, president of RadNet. Science officer.

RadNet has registered an employer in New Jersey that will begin covering breast cancer screenings for its workers, Sorensen said.

The company will also soon launch an AI-enhanced prostate MRI scan for $250. But at this price, it may pose a greater barrier to its adoption and access to patients who cannot afford it.

UCLA neuroscience professor Josh Trachtenberg was willing to pay for prostate cancer screening using AI, which he feels has made a huge difference in his own care.

Trachtenberg says that when he was diagnosed with prostate cancer last year, several doctors told him that he would need to have his prostate removed, a procedure that would have left him with problems of urinary incontinence and impotence.

He turned to a urologist at the UCLA School of Medicine who was using Avenda Health's Unfold AI software. The software measured the extent of the tumor more precisely, allowing the doctor to access cancer cells during surgery while sparing healthy tissue.

Trachtenberg worries that patients who can't afford the additional costs of some AI tools will pay the price with poorer results.

“I think most guys who are not medical school faculty…are put through the meat grinder because that's what insurance covers and that's the 'go to' procedure,” he said.

Perry Bossi, of Avinda Health, fears patients could lose out on new technologies altogether, because uncertainty about reimbursement could hinder funding for innovation.

“As a startup, we are always looking for investors, so making sure there is a clear path to revenue – it is important for us to survive,” she said.

Investors are backing AI developers in healthcare despite payment hurdles. Alex Morgan, partner at Khosla Ventures, is bullish on the sector and recently participated in a large funding round for a company working on radiology AI.

“If you have a human doing a bunch of activities, and then you apply AI, you're not going to get any efficiency gains,” Morgan said, adding that the key to getting paid is “delivering robust, differentiated results.”

In the end, he said, technology that improves the quality of care and outcomes for patients will win out.