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Cleerly recently joined the very exclusive club of medical imaging AI vendors whose solutions are now deemed eligible for reimbursement, with the CMS adding an OPPS code for AI-based coronary plaque assessments.
The move means that Cleerly’s plaque AI solution, as well as similar approved solutions from other vendors, now qualify for reimbursement of between $900 and $1,000, when used with Medicare patients scanned in hospital outpatient settings.
The provisioning of a reimbursement code means that Cleerly joins some of medical imaging AI’s most esteemed vendors, such as HeartFlow, and Perspectum, which are increasingly eroding one of the central barriers to the adoption of medical imaging AI: a clear return on investment for adopters.
The Signify View
In one of his works, playwright, poet and author Oscar Wilde once lamented “cynics” who “know the cost of everything and the value of nothing”. Given Wilde died in 1900, he was unlikely to have been thinking of US healthcare providers when he recorded such an utterance. However, his sentiment may resonate with the medical imaging AI vendors who are desperately trying to convince such providers to take a chance on their solutions.
These vendors have a challenging task ahead of them. One of the most pervasive barriers stymieing the adoption of medical imaging AI in hospitals is the questionable return on investment that some solutions offer. There are, for instance, solutions that offer limited value to providers, perhaps shaving only seconds off the completion of relatively menial tasks, or offering assistance in l low volume niche applications that are far too specialised to be commercially viable.
One of the ways those vendors which do offer clinically valuable solutions can convince hospitals of the worth of their solutions is focusing on demonstrating their value. This is a route taken by the likes of Perspectum, which recently published a study highlighting the cost-effectiveness of its LiverMultiScan software by demonstrating “significant” cost savings when the solution is used.
Other developments, however, focus on the other side of this Wildean balance, and instead of demonstrating value, aim to effectively negate, or at least minimise the cost the provider pays to use a tool.
Of Price and Value
At present, bar a handful of exceptions, providers must pay out of pocket for any AI solutions that they choose to utilise. Given the limited budgets and resources available to devote to a potentially intensive and time-consuming deployment of an AI solution, paying out of their own pocket is an unappealing prospect if they can’t be assured a return. The decision of the CMS to reimburse a solution, however, can assuage these concerns, allowing providers to enjoy the purported benefits of a solution, largely at another’s expense.
Even in cases where reimbursement doesn’t cover the entire cost of a tool’s use, such as that of HeartFlow FFR-CT, which is reimbursed at around $950 even though using the tool costs around $1,500, for a provider, paying $550 out of pocket is much more palatable than having to pay $1,500, especially given HeartFlow’s now well-established credentials.
Although Cleerly, like HeartFlow, targets cardiovascular disease, it offers value in a different way. Heartflow’s FFR-CT solution, can in some circumstances, replace an invasive diagnostic procedure which assesses blood flow within a coronary artery. Cleerly’s solution meanwhile measures the actual blockage of coronary arteries. As such, like HeartFlow, using Cleerly’s solution can avoid the need for an invasive procedure, and instead monitor biomarkers of cardiac disease non-invasively.
Now such assessment can be accomplished by providers, while being paid for by CMS, using Cleerly’s plaque solution is a clear opportunity, and one which comes without any obvious downsides.
For Cleerly, this further bolsters its strong position in the medical imaging AI market. The vendor emerged from stealth mode in June 2021 with a $43m series B funding round, since then it secured a $223m series C round in July 2022. In the Premium Insight evaluating that funding round, we highlighted that the vendor should use that money to push for reimbursement and look to expand its commercial reach. Now, with the former objective achieved, it can better focus on the latter. Its hefty funding rounds gave the vendor the financial firepower to establish effective sales networks, while the reimbursement gives providers a reason to pull the trigger. The use of Cleerly’s tool has, after all, quickly grown from a capable solution, to a capable solution that offers a competitive return on investment.
More broadly, the reimbursement also illustrates the guiding hand of the CMS. Reimbursement has the potential to be transformative for a valuable, yet underutilised solution, instantly removing the biggest barrier to its use. As such, the CMS can offer a boost to any vendors or solutions which it believes are particularly worthy, or any avenues which particularly merit further development. It also has the power to revise reimbursement over time, upping or lowering reimbursement in line with the scale of use and relative “value” of the solution. The body must still be discerning, so almost without exception reimbursement has been granted to vendors which already have mindshare and cachet in the market, but, as it has done with Optellum, it can propel smaller, lesser-known vendors to relative stardom.
Furthermore, reimbursement not only makes certain specific products more appealing, it also can improve the prospects of particular use cases, with vendors offering solutions similar to those which have been approved likely to refine or further develop their own products in order to be able to capitalise on that reimbursement. In this way, the CMS can help shape development of the medical imaging AI market.
At present, this development is leaning further towards cardiac imaging than radiology. Tools that assist in cardiac imaging, from vendors such as HeartFlow and now Cleerly offer significant value to providers, changing patient care pathways, and in the case of Cleerly in particular, offering the opportunity to improve the health of entire populations. This aligns to forecasts made in Signify Research’s AI in Medical Imaging World Market Analysis 2022 – Core Report, which identifies cardiac imaging as the largest medical imaging AI segment over the forecast period.
Compared to cardiac imaging, radiology is somewhat lagging behind. This is largely a result of the nature of many radiology tools. While there are numerous radiology tools on the market, many of them represent limited value propositions. These tools may, for instance, only offer incremental gains, such as marginally increasing the speed at which findings are detected, or fractionally increasing the rate at which measurements are taken. In cardiology, on the other hand, solutions often have far more significant value, shifting a diagnostic pathway or providing earlier diagnosis for example. There are also radiology vendors with similar aims, but in most cases, the benefits are less clear cut than in cardiac imaging.
Another facet of the CMS decision to reimburse the use of Cleerly’s plaque detection solution is the fact it has assigned the vendor an OPPS code, for reimbursement in an outpatient setting. Such a move suggests the body aims to push forward the use of AI in outpatient settings. This makes sense. Outpatient settings represent an attractive setting for AI assistance and keeps pace with the growing preponderance in the US for use of outpatient imaging for non-emergency imaging a more cost-effective setting versus hospitals.
Above all though, the decision by the CMS to provision an OPPS code for Cleerly highlights an important step for the company, propelling it into the upper echelon of medical imaging AI vendors. It does, after all, offer a valuable solution with regulatory clearance, it is well funded and has won the confidence of investors, and now qualifies for reimbursement, incentivising providers to adopt it. More significantly however, it represents a milestone for medical imaging AI as a whole. In this and other recent moves, the CMS has shown that it will support vendors which offer value to providers and will incentivise the use of solutions that can materially improve outcomes for patients.
With its provisioning of a code for Cleerly, the CMS has shown that it is making a more concerted effort to forward the adoption of medical imaging AI. One might even say it has realised the importance of being earnest.
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This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify Research. To view other recent Premium Insights that are part of the service please click here