This letter demonstrates a novel prism-based optical-readout, which uses a single prism to detect the incoming TM polarized wave just below the critical angle. The method is used with a 35-mu m-pixel pitch MEMS thermal sensor, whose inclination angle changes with the absorbed infrared (IR) radiation that results in an increase in the reflectivity at the prism's glass-air interface. We compared this approach with the conventional knife-edge method. Noise equivalent temperature difference for a single sensor was measured as 200 mK for knife-edge method, and 154 mK for the proposed critical angle approach. Our approach shows a significant improvement for the sensitivity of the IR sensor. Both methods utilize an AC-coupled readout method for a single MEMS pixel using a photodetector, which responds only to changes in the scene. This method can be scaled to achieve smart pixel cameras for read sensor arrays with low-noise and high-dynamic range.