Taking a web page from the non-public insurance coverage business’s playbook, the Trump administration will launch a program subsequent 12 months to learn how a lot cash a synthetic intelligence algorithm might save the federal authorities by denying care to Medicare sufferers.
The pilot program, designed to weed out wasteful, “low-value” companies, quantities to a federal growth of an unpopular course of known as prior authorization, which requires sufferers or somebody on their medical staff to hunt insurance coverage approval earlier than continuing with sure procedures, assessments, and prescriptions. It can have an effect on Medicare sufferers, and the docs and hospitals who take care of them, in Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington, beginning Jan. 1 and working by means of 2031.
The transfer has raised eyebrows amongst politicians and coverage specialists. The standard model of Medicare, which covers adults 65 and older and a few folks with disabilities, has principally eschewed prior authorization. Nonetheless, it’s extensively utilized by non-public insurers, particularly within the Medicare Benefit market.
And the timing was shocking: The pilot was introduced in late June, simply days after the Trump administration unveiled a voluntary effort by non-public well being insurers to revamp and cut back their very own use of prior authorization, which causes care to be “significantly delayed,” stated Mehmet Oz, administrator of the Facilities for Medicare & Medicaid Companies.
“It erodes public trust in the health care system,” Oz advised the media. “It’s something that we can’t tolerate in this administration.”
However some critics, like Vinay Rathi, an Ohio State College physician and coverage researcher, have accused the Trump administration of sending blended messages.
On one hand, the federal authorities desires to borrow cost-cutting measures utilized by non-public insurance coverage, he stated. “On the other, it slaps them on the wrist.”
Administration officers are “talking out of both sides of their mouth,” stated Rep. Suzan DelBene, a Washington Democrat. “It’s hugely concerning.”
Sufferers, docs, and different lawmakers have additionally been vital of what they see as delay-or-deny ways, which may decelerate or block entry to care, inflicting irreparable hurt and even demise.
“Insurance companies have put it in their mantra that they will take patients’ money and then do their damnedest to deny giving it to the people who deliver care,” stated Rep. Greg Murphy, a North Carolina Republican and a urologist. “That goes on in every insurance company boardroom.”
Certainly, Oz stated throughout his June press convention that “violence in the streets” prompted the Trump administration to tackle the difficulty of prior authorization reform within the non-public insurance coverage business.
Nonetheless, the administration is increasing the usage of prior authorization in Medicare. CMS spokesperson Alexx Pons stated each initiatives “serve the same goal of protecting patients and Medicare dollars.”
Unanswered Questions
The pilot program, WISeR — quick for “Wasteful and Inappropriate Service Reduction” — will take a look at the usage of an AI algorithm in making prior authorization choices for some Medicare companies, together with pores and skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy.
The federal authorities says such procedures are notably susceptible to “fraud, waste, and abuse” and could possibly be held in examine by prior authorization.
Different procedures could also be added to the listing. However companies which can be inpatient-only, emergency, or “would pose a substantial risk to patients if significantly delayed” wouldn’t be topic to the AI mannequin’s evaluation, in accordance with the federal announcement.
Whereas the usage of AI in medical insurance isn’t new, Medicare has been gradual to undertake the private-sector instruments. Medicare has traditionally used prior authorization in a restricted means, with contractors who aren’t incentivized to disclaim companies. However specialists who’ve studied the plan imagine the federal pilot might change that.
“Shared savings arrangements mean that vendors financially benefit when less care is delivered,” a construction that may create a strong incentive for firms to disclaim medically obligatory care, stated Jennifer Brackeen, senior director of presidency affairs for the Washington State Hospital Affiliation.
And docs and coverage specialists say that’s just one concern.
Rathi stated the plan “is not fully fleshed out” and depends on “messy and subjective” measures. The mannequin, he stated, finally is dependent upon contractors to evaluate their very own outcomes, a selection that makes the outcomes probably suspect.
“I’m not sure they know, even, how they’re going to figure out whether this is helping or hurting patients,” he stated.
Pons stated the usage of AI within the Medicare pilot might be “subject to strict oversight to ensure transparency, accountability, and alignment with Medicare rules and patient protection.”
“CMS remains committed to ensuring that automated tools support, not replace, clinically sound decision-making,” he stated.
Consultants agree that AI is theoretically able to expediting what has been a cumbersome course of marked by delays and denials that may hurt sufferers’ well being. Well being insurers have argued that AI eliminates human error and bias and can save the well being care system cash. These firms have additionally insisted that people, not computer systems, are finally reviewing protection choices.
However some students are uncertain that’s routinely taking place.
“I think that there’s also probably a little bit of ambiguity over what constitutes ‘meaningful human review,’” stated Amy Killelea, an assistant analysis professor on the Middle on Well being Insurance coverage Reforms at Georgetown College.
A 2023 report printed by ProPublica discovered that, over a two-month interval, docs at Cigna who reviewed requests for fee spent a median of just one.2 seconds on every case.
And but class-action lawsuits filed in opposition to main well being insurers have alleged that flawed AI fashions undermine physician suggestions and fail to take sufferers’ distinctive wants into consideration, forcing some folks to shoulder the monetary burden of their care.
In the meantime, a survey of physicians printed by the American Medical Affiliation in February discovered that 61% suppose AI is “increasing prior authorization denials, exacerbating avoidable patient harms and escalating unnecessary waste now and into the future.”
‘This Is a Pilot’
The Medicare pilot program underscores ongoing issues about prior authorization and raises new ones.
Whereas non-public well being insurers have been opaque about how they use AI and the extent to which they use prior authorization, coverage researchers imagine these algorithms are sometimes programmed to mechanically deny high-cost care.
“The more expensive it is, the more likely it is to be denied,” stated Jennifer Oliva, a professor on the Maurer Faculty of Regulation at Indiana College-Bloomington, whose work focuses on AI regulation and well being protection.
Oliva defined in a latest paper for the Indiana Regulation Journal that when a affected person is anticipated to die inside a couple of years, well being insurers are “motivated to rely on the algorithm.” As time passes and the affected person or their supplier is compelled to attraction a denial, the possibility of the affected person dying throughout that course of will increase. The longer an attraction, the much less probably the well being insurer is to pay the declare, Oliva stated.
“The No. 1 thing to do is make it very, very difficult for people to get high-cost services,” she stated.
As the usage of AI by well being insurers is poised to develop, insurance coverage firm algorithms quantity to a “regulatory blind spot” and demand extra scrutiny, stated Carmel Shachar, a school director at Harvard Regulation Faculty’s Middle for Well being Regulation and Coverage Innovation.
The WISeR pilot is “an interesting step” towards utilizing AI to make sure that Medicare {dollars} are buying high-quality well being care, she stated. However the lack of particulars makes it troublesome to find out whether or not it would work.
Politicians are grappling with a number of the identical questions.
“How is this being tested in the first place? How are you going to make sure that it is working and not denying care or producing higher rates of care denial?” requested DelBene, who signed an August letter to Oz with different Democrats demanding solutions concerning the AI program. However Democrats aren’t the one ones nervous.
Murphy, who co-chairs the Home GOP Medical doctors Caucus, acknowledged that many physicians are involved the WISeR pilot might overreach into their follow of drugs if the AI algorithm denies doctor-recommended care.
In the meantime, Home members of each events just lately supported a measure proposed by Rep. Lois Frankel, a Florida Democrat, to dam funding for the pilot within the fiscal 2026 funds of the Division of Well being and Human Companies.
AI in well being care is right here to remain, Murphy stated, however it stays to be seen whether or not the WISeR pilot will save Medicare cash or contribute to the issues already posed by prior authorization.
“This is a pilot, and I’m open to see what’s going to happen with this,” Murphy stated, “but I will always, always err on the side that doctors know what’s best for their patients.”
Initially Revealed: October 7, 2025 at 11:40 AM EDT
