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STAT+: What Medicare incentives for AI-based devices mean for tech companies — and hospitals

Medicare's temporary add-on payments for new AI-based medical devices are helping AI startups convince hospitals to adopt their technologies, according to a STAT series on AI in health care. The payments, funded by taxpayers, provide two to three years of extra reimbursement to offset the cost of new, expensive technologies, making them more attractive to hospitals focused on return on investment.

read1 min views1 publishedAug 13, 2026
STAT+: What Medicare incentives for AI-based devices mean for tech companies — and hospitals
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You’re reading Part 4 of Paying for AI, a series examining how new clinical artificial intelligence tools influence the affordability of health care and patients’ long-term health. Here’s Part 1, Part 2, and Part 3.

For hospitals, the promise of artificial intelligence is financial as much as clinical. A hospital might deploy an AI device because it promises to throw up an alert that could save a patient’s life — but the technology is far more likely to stick if it proves it can drive down costs. Convincing hospitals and health systems that a new technology will provide that return on investment is tricky, though. So some AI startups have benefited from a temporary sweetener that helps customers get on board: Certain new technologies can apply to get add-on payments from Medicare for two or three years after they come to market. The tax-dollar-funded payments are meant as an incentive to help get new, expensive medical technologies to patients.

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