PiTech Solutions Podcast
Healthcare - Medicare Pays for AI While Regulators Limit It | PiTech Solutions Podcast
Healthcare: Medicare Pays for AI While Regulators Limit It American healthcare is doing two opposite things at once. Washington is funneling record dollars into AI enabled technology at the bedside, and at the same time federal and state regulators are writing rules that strip AI of the authority to decide anything about a patient. In this episode, Mike and Laura unpack what that split means for executives in regulated industries. The WISeR Model. The CMS Innovation Center's WISeR Model runs for six performance years, from January 1, 2026 through December 31, 2031, across New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington. CMS describes it as leveraging enhanced technologies such as artificial intelligence and machine learning alongside human clinical review, testing AI assisted prior authorization for 13 medical services deemed low value or vulnerable to fraud, waste, abuse or misuse. Critically, CMS states that all recommendations for non payment are determined by appropriately licensed clinicians. The model survived a Senate resolution of disapproval on July 16, 2026 by a party line vote of 46 to 50. The money side. In the FY 2027 Inpatient Prospective Payment System final rule, CMS finalized a 2.3 percent payment rate increase and expects hospital payments to rise by roughly $2.1 billion overall. Within that, CMS estimates additional payments for inpatient cases involving new medical technologies will increase by approximately $779 million, primarily driven by new approvals for New Technology Add on Payments. STAT News reported on August 13, 2026 that a record number of AI devices qualified for those payments this year, and that researchers warn the incentive could drive overuse. Because add on payments last only two or three years after a technology reaches market, any business case built on them is a two to three year business case. The states are moving faster than Washington. Washington's SB 5395 (effective June 11, 2026), Iowa's HF 2635 (effective July 1, 2026), Colorado's HB 1139 (effective January 1, 2027) and Alabama's SB 63 (effective October 1, 2026) all converge on the same principle: AI may assist, but it cannot be the sole basis for denying, delaying or modifying care. Alabama goes further and requires insurers to disclose when AI was used in the review process, turning a transparency rule into an audit trail engineering requirement. What the industry actually asked for. Responding to an HHS request for information on AI in healthcare, stakeholders asked for coordination of AI strategy across agencies, implementation and governance support, and evaluation and benchmarking tools. HHS deputy chief AI officer Arman Sharma named the coordination problem plainly: "Too often in government, the right hand doesn't talk to the left hand." Dr. Rick Abramson, director of the FDA's Digital Health Center of Excellence, framed the pace gap: "It's been said that technology evolves on a scale of weeks to months, while regulation evolves on a scale of months to years." The takeaways generalize well past healthcare: treat human in the loop as a compliance primitive rather than a feature, never build a business case on a bridge payment, and build the audit trail before disclosure rules force you to retrofit one. Healthcare is simply early. Banking, insurance and capital markets are next. To learn more about how PiTech Solutions helps enterprises in regulated industries build, govern and scale AI, visit pitechsol.com . #HealthcareAI #RegulatoryCompliance #DigitalTransformation #MedicareInnovation #AIGovernance
