MedPAC Delves Into Software as a Service Payment

The Medicare Payment Advisory Commission (MedPAC) discussed coverage and payment for software as a service (SaaS) and several payment policies during its November meeting. Medicare has covered and paid for SaaS — algorithm-driven software that assists clinicians in making assessments — since 2018. Ten SaaS codes now are recognized under both the Hospital Outpatient Prospective Payment System (HOPPS) and the Medicare Physician Fee Schedule (MPFS). Most SaaS codes currently have low volumes of utilization and are reimbursed differently under each respective system.

Commissioners discussed the importance of creating incentives for the development of software that leads to substantial and measurable clinical improvement with appropriate reimbursement and affordability for beneficiaries and taxpayers. Concerns were shared about separate payment for SaaS, as MedPAC has long supported larger bundled payments. Commissioners assert that separate payment incentivizes software companies to push for higher reimbursement rates, when increased clinical benefits with decreased costs to beneficiaries should be the goal.

MedPAC is a non-partisan, independent legislative branch commission created to advise Congress about Medicare-related issues.

For more information or if you have questions, contact Kimberly Greck, American College of Radiology® (ACR®) Senior Economic Policy Analyst.