Congress Funds Lung Imaging AI for Vets

A bipartisan House bill just opened a third door for radiology AI reimbursement that most of the industry has not noticed yet - and the clinical data behind it is impossible to argue with.

Jul 29, 2026

On July 14, 2026, two members of Congress from opposite parties did something the radiology AI industry has been waiting years for someone to do: they wrote a direct line-item appropriation for a specific category of FDA-cleared imaging software.

Not a research grant. Not a pilot buried in a continuing resolution. Not another CMS rulemaking cycle. A named bill with a named funding amount, directing a named federal agency to lease a named category of technology and deploy it for a named patient population.

H.R. 9666, the AIR CARE for Vets Act - Advanced Imaging for Respiratory Care, Assessment, and Research Excellence for Veterans - authorizes $5 million per year for fiscal years 2027 through 2031, a total of $25 million, for the Department of Veterans Affairs to run a five-year pilot using FDA-cleared four-dimensional functional lung imaging software at VA medical facilities.

The bill's sponsors are Rep. Juan Ciscomani (R-AZ) and Rep. Chris Pappas (D-NH), both members of the House Committee on Veterans' Affairs.

The number that matters is not $25 million. It is the mechanism. Congress bypassed CMS entirely.

Before we walk through what this bill does and why it matters, you need to understand what problem it is trying to solve - because the clinical case is airtight, and that is exactly why the policy case works.

1. The Burn Pit Crisis Congress Is Responding To

When American service members deployed to Iraq, Afghanistan, Kuwait, and other locations in the post-2001 era, they worked alongside open-air burn pits. These were the military's disposal method for waste at forward operating bases - everything from food scraps to ammunition, medical waste to aircraft fuel. The smoke was constant. The exposure was prolonged. And for hundreds of thousands of veterans, the consequences are now showing up in their lungs two, five, fifteen years later.

The Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act - the PACT Act - was signed into law in August 2022. It established presumptive service connection for dozens of conditions linked to burn pit exposure, covering more than 330 specific medical conditions.

The results have been significant. Before the PACT Act, VA approved approximately 25% of burn pit-related claims. Post-PACT Act, that approval rate has climbed to roughly 78%. Respiratory diseases now represent more than 70% of all PACT Act claims filed in 2026. The conditions range from chronic bronchitis, COPD, and asthma to interstitial lung disease, pulmonary fibrosis, and constrictive bronchiolitis - a scarring condition of the small airways that can be nearly impossible to detect with standard testing.

Disability ratings for respiratory conditions like COPD and asthma now pay 50 to 70 percent ratings, translating to $1,132.90 to $1,808.45 monthly for single veterans in 2026. The human scale of this is enormous: millions of veterans, billions of dollars in disability compensation, and a diagnostic infrastructure that was not designed to find these specific patterns of lung damage.

That last point is where H.R. 9666 comes in.

2. Why Standard Imaging Fails These Veterans

Here is the clinical problem at the core of the AIR CARE for Vets Act, stated plainly by the bill's sponsors: standard whole-lung testing procedures can be less sensitive to changes in lung function seen in early disease or when abnormalities are limited to a specific region.

That is legislative understatement for a real diagnostic gap.

Constrictive bronchiolitis - one of the most common serious diagnoses in post-deployment respiratory syndrome - is a condition that scars the small airways, impairing airflow in ways that are regional and heterogeneous. Conventional CT scanning shows structure. It shows whether the airways look normal on cross-section. It does not show function. It does not show airflow distribution across tens of thousands of locations within the lung.

Standard pulmonary function tests (PFTs) measure total lung capacity and flow rates as whole-lung aggregates. A veteran with constrictive bronchiolitis affecting specific lung regions can have PFT values that fall within normal range. Their CT can look unremarkable. But their lungs are failing silently, region by region.

Vanderbilt University Medical Center conducted a pilot study evaluating functional lung imaging software in post-deployment veterans referred by the Nashville VA. The result was significant: the technology successfully and non-invasively detected constrictive bronchiolitis in veterans whose condition was undetectable with standard CT scanning and PFT testing combined.

That is not an incremental improvement over existing diagnostics. It is detecting a disease that was previously invisible.

Veterans with constrictive bronchiolitis who pass standard CT and PFT testing can walk out of the VA without a diagnosis - and without service-connected benefits.

3. The Technology Behind the Bill - CT LVAS

The bill's language points to 'a four-dimensional functional lung imaging software product that has been approved by the Food and Drug Administration to evaluate lung function.' That language fits exactly one currently cleared product: 4DMedical's CT LVAS.

CT LVAS received FDA 510(k) clearance in November 2023. The technology is built on aerospace-derived algorithms - the same computational approaches used to model airflow in aerospace engineering - applied to existing CT scan data. It does not require new capital equipment. A CT scanner produces the input; CT LVAS processes that data in the cloud and returns a Ventilation Report that overlays color-coded, quantified regional ventilation data on top of the patient's existing CT images.

What this produces clinically is a functional read layered on top of a structural one. The radiologist and pulmonologist can see not just what the lung looks like, but how air is moving through each region. Ventilation heterogeneity - the uneven distribution of airflow that is the hallmark of constrictive bronchiolitis - becomes visible, quantified, and documented.

For veteran care, this has three concrete implications. First, it catches cases that would otherwise go undiagnosed - the Vanderbilt study proved this directly. Second, it uses existing infrastructure: VA medical facilities already have CT scanners, and CT LVAS requires no capital investment. Third, it produces quantified, documentable output: a color-coded ventilation map is a fundamentally different evidentiary document than a radiologist note saying the scan 'appears unremarkable.'

4. The Third Door for Radiology AI Reimbursement

This is where the story moves beyond veterans.

The radiology AI industry has spent years navigating two primary paths to sustainable revenue: CMS payment codes and the New Technology Add-on Payment (NTAP) program.

The CMS payment code pathway - earning a Category I CPT code or a HCPCS code - is the gold standard for reimbursement. CPT 0721T for AI-assisted lung nodule assessment and CPT 75577 for AI-assisted cardiac CT analysis represent genuine Category I recognition that took years of clinical data accumulation and advocacy to achieve. Most radiology AI companies never reach this destination. The timeline from FDA clearance to Category I payment can exceed five years. Many run out of runway first.

The NTAP pathway is faster but has its own gatekeepers. CMS has rejected NTAP applications for AI tools assessing pulmonary embolism and ASPECTS scoring for stroke CT, finding they did not demonstrate 'substantial improvement' over existing technologies by the standard CMS criteria. Even when NTAP is granted, it is temporary, inpatient-only, and does not address outpatient or physician fee schedule gaps.

H.R. 9666 represents a third door: direct congressional appropriation for a defined patient population where the clinical evidence is unambiguous and the regulatory pathway is already complete. This mechanism bypasses the CMS rate-setting process entirely.

The precedent matters enormously. H.R. 9666 is the first direct appropriation structured around a defined category of FDA-cleared imaging software with a clearly circumscribed clinical use case and a specific patient population. Any radiology AI tool that is FDA-cleared, addresses a clinical gap in a defined federal patient population, and can demonstrate outcomes that standard care cannot match now has a model to follow.

5. The Veterans Health System Context

It would be a mistake to read H.R. 9666 as a technology outlier in the VA system. The VA has become one of the most aggressive deployers of AI in the federal healthcare space.

As of June 2026, the VA has disclosed 367 artificial intelligence use cases operating across the agency. Of those, 215 are classified as high-impact systems supporting healthcare, benefits processing, records management, and internal operations. The VA launched an ambient AI scribe in October 2025 and is now expanding it to all VA medical centers nationwide through 2026.

The infrastructure for AI adoption is already built at the VA. It has procurement frameworks, technology review processes, and clinical integration protocols for AI tools that most private health systems are still assembling. A new imaging AI contract does not require the VA to invent a process - it requires the VA to execute through an existing one.

This is critical for the timeline math. In the commercial healthcare market, getting a cleared AI tool deployed across multiple health systems can take two to four years after FDA clearance, even with a CMS payment code in hand. The VA, by contrast, can deploy centrally, rapidly, and with mandatory adoption timelines tied to appropriations language.

6. Three Questions Every Imaging AI Leader Should Ask Right Now

Question 1: Is there a defined federal patient population your cleared software could serve?

VA, DoD, Indian Health Service, and FQHC patient populations are all defined federal populations. They are distinct from the CMS Medicare/Medicaid population in the crucial sense that Congress can appropriate funds directly for technology serving these groups without touching CMS payment structures.

For imaging AI companies with FDA clearance, the question is whether their clinical indication overlaps with a federal patient population where the clinical gap is large enough to attract bipartisan support. Burn pit respiratory disease was easy: it is a veteran-specific problem, the harm is documented, the population is politically sympathetic, and the standard of care was measurably failing.

Question 2: Does your technology address a documented clinical gap where standard care is already failing?

This is the clinical predicate that made the AIR CARE for Vets Act defensible. Constrictive bronchiolitis undetectable by standard CT and PFT is not a contested clinical argument. The Vanderbilt study, 4DMedical's veteran advocacy work, and the clinical testimony of VA pulmonologists create a documented record that legislators can cite and defend.

For imaging AI companies without peer-reviewed outcomes data in a specific population, this is the gap to close before a congressional appropriation strategy becomes viable.

Question 3: Can your product category survive a legislative definition without naming your vendor?

H.R. 9666 says 'four-dimensional functional lung imaging software product that has been approved by the Food and Drug Administration to evaluate lung function.' It does not say '4DMedical.' But in July 2026, only one product fits that description.

Legislative category language that accurately describes your technology without explicitly naming it is both more defensible in Congress and more durable over time. If your product is the only cleared option in a well-defined category, the legislative language effectively achieves vendor specificity without triggering procurement objections.

Deep Dive: The Legislative Template

The AIR CARE for Vets Act is not complex legislation. The core operational section is roughly 400 words. That brevity is a feature, not a limitation - it is what makes the bill bipartisan and tractable.

The Funding Mechanism

The $25 million total authorization breaks into $5 million per year across five fiscal years. This is sized specifically for a government procurement at the VA scale - not for commercial expansion or research, but to fund a SaaS software lease across VA medical facilities for a defined period with a reporting requirement.

The reporting requirement is significant. The VA Secretary must report the pilot's effectiveness back to Congress. That creates a formal clinical evidence record, generated at federal expense, using real VA patient data, reviewed by Congress. If the pilot demonstrates clinical outcomes - diagnosed cases, benefits determinations supported, improved lung function tracking - that evidence record becomes the basis for a permanent authorization or a funding increase in the next appropriations cycle.

The PACT Act Connection

The PACT Act established the legal framework that makes H.R. 9666 possible. By creating presumptive service connection for burn pit respiratory disease, the PACT Act generated both a large patient population and a benefit administration system where better diagnostics directly translate to better benefit outcomes. H.R. 9666 is PACT Act implementation infrastructure.

What Needs to Happen for This to Become Law

The bill was referred to the House Committee on Veterans' Affairs. Getting out of committee requires either a strong push from committee leadership or incorporation into a larger veterans' affairs package. Bipartisan sponsorship from two committee members is a meaningful signal of intent.

The companion strategy - getting a Senate sponsor and an identical bill introduced in the Senate Veterans' Affairs Committee - would significantly accelerate passage timelines. The most likely path to enactment is inclusion in the next Veterans' Benefits and Services Improvement Act or a similar omnibus VA authorization bill.

What This Means For You

FQHC executives and community health center leaders: Many FQHC patients are veterans. The PACT Act eligibility of your veteran patient panel may be underdiagnosed for respiratory conditions. As functional imaging becomes more accessible through VA deployment, ask your VA-affiliated referral pathways whether this diagnostic tool will be available for shared patients.

Health system administrators and CMOs: Watch the VA pilot reporting cycle beginning in FY2027. The clinical evidence generated at VA scale will be the strongest outcomes dataset yet produced for functional lung imaging in post-deployment respiratory syndrome. If your system treats veterans, the pilot outcomes will directly inform whether adding CT LVAS to your pulmonology and radiology service lines is clinically defensible.

Radiologists and pulmonologists: The AIR CARE for Vets Act validates a diagnostic gap you have likely already seen in practice. Veterans with post-deployment respiratory symptoms who pass standard CT and PFT evaluation are not rare. Begin documenting the cases you are seeing now.

Healthcare investors and founders: H.R. 9666 is a proof of concept for the congressional appropriation path to radiology AI revenue. The formula: FDA clearance, documented clinical gap, defined federal patient population, category language that fits your product. If you have portfolio companies that meet three of four criteria, the fourth is achievable.

Policy advocates: The AIR CARE for Vets Act moves fastest if bundled into the next VA omnibus authorization bill. The Senate companion bill would dramatically accelerate that inclusion. The comment period window, the legislative calendar, and the political environment all favor action in the next six months.

Congress just handed the radiology AI industry a working blueprint.

The challenge for the last decade has been that FDA clearance and CMS reimbursement are two different problems, each requiring years of work, and the gap between them has been where radiology AI companies go to die financially. The AIR CARE for Vets Act is not a solution to that gap for the commercial market. But it is proof that a different mechanism exists.

The veterans who need functional lung imaging are not waiting for CMS to establish a payment code. They have been deployed. They have been exposed. They have been filing claims that the diagnostic system could not fully support. H.R. 9666 is Congress recognizing that the standard of care was inadequate and writing a check to fix it.

For the imaging AI industry watching from the outside, the lesson is simpler than it sounds: if your technology is cleared, your clinical evidence is solid, and your patient population has a congressional champion, the third door is already open. The question is whether you are building toward it.

What are you seeing in your own practice or portfolio with post-deployment respiratory syndrome? Reply directly to this newsletter.

About the Author

Jonathan Govette is the Co-Founder and CEO of Oatmeal Health, an AI lung cancer diagnostic company catching cancers earlier in the communities that need it most. Oatmeal uses AI to identify unscreened high-risk patients, navigate them to care, and score every lung CT for malignancy risk - billed under CPT 0721T. Stage I survival is 77%. Stage IV is 9%. We work in FQHCs because that gap is largest there.

Jonathan writes daily about radiology, pulmonology, AI diagnostics, health policy, hospital operations, and healthcare startups.

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Key References

Pappas.house.gov: 'Pappas and Ciscomani Introduce Bipartisan AIR CARE for Vets Act' (July 2026) - full bill text and sponsorship details.

xAID.ai: 'Congress Wants to Pay for FDA-Cleared Imaging AI. Here's Why That Matters Beyond Veterans.' (July 20, 2026)

4DMedical: CT LVAS FDA clearance (November 2023); Vanderbilt pilot study; Veteran Care Collaboration program documentation.

Military Times: 'VA inventory report reveals 367 AI systems operating in healthcare, benefits and services' (June 2026).

VA Disability Hub / PACT Act 2026 update: Burn pit claim approval rate data; respiratory conditions represent 70%+ of 2026 PACT Act claims.

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