The Health Tech Investment Act modifies how Medicare pays for healthcare services that use artificial intelligence and machine learning algorithms. Starting January 1, 2026, the bill requires Medicare to assign algorithm-based services (such as AI-powered diagnostic or screening tools approved by the FDA) to a special payment category based on actual costs submitted by manufacturers, including technology licensing, staff time, and overhead. Once assigned, Medicare cannot remove these services from this favorable payment classification for at least five years, ensuring stable reimbursement while adequate claims data accumulates. The bill also clarifies that software-as-a-service products used by hospitals are eligible for payment under existing rules retroactive to January 1, 2023. This legislation primarily affects Medicare providers and manufacturers of healthcare technology, aiming to encourage investment and innovation in AI-driven medical tools by providing predictable payment policies during their early adoption period.
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