AI Lung Nodule Analysis Has a
Medicare Reimbursement Pathway
CPT codes 0721T and 0722T already reimburse quantitative CT tissue characterization of lung nodules at $650.50 per analysis under Medicare OPPS. Oatmeal Health is building LungAI to fit squarely within this existing payment pathway post FDA 510(k) clearance.
CT Scan Acquired
LDCT performed or prior imaging available
AI Tissue Characterization
Quantitative analysis generates Malignancy Risk Score
Report & Bill
Physician report filed, claim submitted to Medicare
CMS already pays for AI-driven quantitative CT tissue characterization of lung nodules under dedicated Category III CPT codes established by the AMA in July 2022. These codes are active, assigned to a specific APC, and carry a national payment rate today.
Oatmeal Health's LungAI platform is designed to perform exactly this type of analysis: quantitative tissue characterization that generates malignancy risk scores to support radiologists and pulmonologists. Once LungAI receives FDA 510(k) clearance, providers will be able to bill for LungAI analyses under the same codes that CMS already reimburses.
Dedicated Codes for CT Tissue Characterization
Two Category III CPT codes cover AI-driven quantitative analysis of lung nodules, whether performed on prior imaging or alongside a new CT scan.
Quantitative computed tomography (CT) tissue characterization, including interpretation and report, obtained without concurrent CT examination
When to use
Bill this code when the AI analysis is performed on a previously acquired CT scan. The patient does not need to be present for a new scan. Common scenario: a radiologist reviews a prior CT and runs quantitative tissue characterization on an existing nodule finding.
Billing status
This is a standalone code. It is billed independently.
Quantitative computed tomography (CT) tissue characterization, including interpretation and report, obtained with concurrent CT examination
When to use
Bill this code when the AI analysis is performed at the same encounter as a new CT scan. The quantitative tissue characterization is an add-on to the primary CT procedure. Common scenario: patient comes in for a follow-up CT and the analysis is run on the new images during the same visit.
Billing status
This is an add-on code. It must be billed alongside a primary CT procedure code (e.g., 71250, 71260, or 71270).
Both codes are Category III CPT codes assigned by the AMA to track emerging technologies. The Category III designation runs for a five-year period (started July 2022). These codes carry full Medicare OPPS reimbursement. You cannot bill both 0721T and 0722T for the same patient encounter.
APC 1508: $650.50 Per Analysis
CMS has assigned CPT 0721T to Ambulatory Payment Classification 1508 (New Technology, Level 8) under the Hospital Outpatient Prospective Payment System.
$650.50
National Base Rate
Medicare OPPS base payment for CPT 0721T under APC 1508 (CY 2025 Final Rule). Actual payments vary by geographic wage index.
APC 1508
Payment Classification
New Technology, Level 8. CMS recognition of the clinical value of AI-driven lung nodule analysis.
SI: S
Status Indicator
Significant procedure. Not discounted when performed alongside other procedures in the same encounter.
Why This Matters for LungAI
Many AI diagnostic tools face a "reimbursement gap," where no payment pathway exists even after FDA clearance. For quantitative CT tissue characterization of lung nodules, that gap does not exist. CMS has already established the APC, set a national rate, and providers are billing under these codes today.
Oatmeal Health is building LungAI to align directly with the clinical workflow these codes describe. Once LungAI achieves FDA 510(k) clearance, providers will be able to bill for LungAI analyses under the same codes, at the same rates, with no additional CMS action required.
The Status Indicator "S" classification means 0721T is paid at the full APC rate even when performed alongside other outpatient procedures. There is no multiple-procedure discount. Payment amounts are updated annually in the CMS OPPS Final Rule and may vary by geographic region due to wage index adjustments.
Supporting ICD-10-CM Codes
Claims for CPT 0721T and 0722T require a supporting ICD-10-CM diagnosis code. The following codes cover the primary clinical scenarios for AI-driven lung nodule analysis.
| ICD-10-CM Code | Description | Clinical Scenario |
|---|---|---|
| R91.1 | Solitary pulmonary nodule | Single lung nodule found on CT imaging. Most common primary diagnosis for nodule characterization. |
| R91.8 | Other nonspecific abnormal finding of lung field | Multiple nodules or other lung findings requiring further characterization. |
| Z87.09 | Personal history of other diseases of the respiratory system | Prior respiratory disease with follow-up nodule evaluation. |
| Z12.2 | Encounter for screening for malignant neoplasm of respiratory organs | Lung cancer screening encounter. Used when analysis is part of a screening workflow. |
| J84.09 | Other alveolar and parieto-alveolar conditions | Interstitial lung abnormalities seen alongside nodules on screening CT. |
Diagnosis code selection should reflect the documented clinical indication for the analysis. R91.1 (solitary pulmonary nodule) is the most commonly paired code. Multiple diagnosis codes may be submitted on the same claim when clinically appropriate. Always follow your institution's coding guidelines and payer-specific requirements.
How Providers Bill and Get Paid
A practical guide to claim submission for quantitative CT tissue characterization under CPT 0721T and +0722T. These billing workflows are available today for FDA-cleared products.
Hospital Outpatient Setting
Facility Billing
Hospitals and hospital-based imaging centers bill 0721T on the UB-04 (CMS-1450) institutional claim form. The facility receives the full APC base payment of $650.50 (unadjusted). Revenue code 0404 (Other Imaging Services) or 0962 (Professional Fees, Other) is typically appropriate.
Physician Component
The interpreting radiologist or pulmonologist bills a separate professional claim (CMS-1500) for the interpretation. Professional payment rates vary by locality and are set in the Medicare Physician Fee Schedule.
Freestanding Imaging Center
Global Billing
Freestanding radiology practices bill the global service (technical + professional) on a single CMS-1500 claim. The combined payment reflects both the technical analysis and the physician interpretation.
Place of Service
Use Place of Service 22 (On Campus-Outpatient Hospital) for hospital settings, or 11 (Office) / 15 (Mobile Unit) for freestanding locations. POS affects the Medicare payment rate applied.
Claim Submission Checklist
- Verify the product used holds FDA clearance for quantitative CT tissue characterization
- Document clinical indication and supporting ICD-10-CM diagnosis code (e.g., R91.1)
- Confirm the analysis was ordered by a qualified physician
- Include the interpreting physician's report in the medical record
- Submit CPT 0721T (standalone) or +0722T (with concurrent CT, alongside primary CT code)
- Do not bill both 0721T and +0722T for the same patient encounter
- Apply appropriate modifiers (26 for professional component, TC for technical, if split billing)
- Check your MAC's local coverage determination for any additional documentation requirements
Get this checklist as a printable PDF sent straight to your inbox.
Ready to Bring Reimbursable AI
to Your Lung Screening Program?
Learn how Oatmeal Health is building LungAI to fit within the existing Medicare reimbursement pathway for quantitative CT tissue characterization.
LungAI is an investigational clinical decision support tool under development by Oatmeal Health. It is not FDA-cleared, is not available for clinical use, and does not replace physician judgment. Billing under CPT 0721T will be available following FDA 510(k) clearance.