Lauren Sausser and Darius Tahir
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 the way a lot cash a synthetic intelligence algorithm may save the federal authorities by denying care to Medicare sufferers.
The pilot program, designed to weed out wasteful, “low-value” providers, quantities to a federal enlargement 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 will have an effect on Medicare sufferers, and the medical doctors and hospitals who look after them, in Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington, beginning Jan. 1 and working by way of 2031.
The transfer has raised eyebrows amongst politicians and coverage consultants. The conventional model of Medicare, which covers adults 65 and older and a few individuals with disabilities, has principally eschewed prior authorization. Still, it’s broadly utilized by non-public insurers, particularly within the Medicare Advantage market.
And the timing was stunning: The pilot was announced 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,” mentioned Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services.
“It erodes public trust in the health care system,” Oz informed the media. “It’s something that we can’t tolerate in this administration.”
But some critics, like Vinay Rathi, an Ohio State University 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 mentioned. “On the other, it slaps them on the wrist.”
Administration officers are “talking out of both sides of their mouth,” mentioned Rep. Suzan DelBene, a Washington Democrat. “It’s hugely concerning.”
Patients, medical doctors, and different lawmakers have additionally been vital of what they see as delay-or-deny tactics, which might decelerate or block entry to care, causing irreparable harm and even death.
“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,” mentioned Rep. Greg Murphy, a North Carolina Republican and a urologist. “That goes on in every insurance company boardroom.”
Insurers have lengthy argued that prior authorization reduces fraud and wasteful spending, in addition to prevents potential hurt. Public displeasure with insurance coverage denials dominated the information in December, when the shooting death of UnitedHealthcare’s CEO led many to anoint his alleged killer as a people hero.
And the general public broadly dislikes the observe: Nearly three-quarters of respondents thought prior authorization was a “major” drawback in a July poll published by KFF, a well being info nonprofit that features KFF Health News.
Indeed, Oz mentioned throughout his June press convention that “violence in the streets” prompted the Trump administration to tackle the problem of prior authorization reform within the non-public insurance coverage business.
Still, the administration is increasing using prior authorization in Medicare. CMS spokesperson Alexx Pons mentioned 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 check using an AI algorithm in making prior authorization selections for some Medicare providers, together with pores and skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy.
The federal authorities says such procedures are notably weak to “fraud, waste, and abuse” and could possibly be held in verify by prior authorization.
Other procedures could also be added to the listing. But providers 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 keeping with the federal announcement.
While using AI in medical insurance isn’t new, Medicare has been sluggish to undertake the private-sector instruments. Medicare has traditionally used prior authorization in a restricted manner, with contractors who aren’t incentivized to disclaim providers. But consultants who’ve studied the plan consider the federal pilot may change that.
Pons informed KFF Health News that no Medicare request shall be denied earlier than being reviewed by a “qualified human clinician,” and that distributors “are prohibited from compensation arrangements tied to denial rates.” While the federal government says distributors shall be rewarded for financial savings, Pons mentioned a number of safeguards will “remove any incentive to deny medically appropriate care.”
“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 crucial care, mentioned Jennifer Brackeen, senior director of presidency affairs for the Washington State Hospital Association.
And medical doctors and coverage consultants say that’s just one concern.
Rathi mentioned the plan “is not fully fleshed out” and depends on “messy and subjective” measures. The mannequin, he mentioned, in the end relies on contractors to evaluate their very own outcomes, a alternative 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 mentioned.
Pons mentioned using AI within the Medicare pilot shall 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 mentioned.
Experts 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. Health 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 in the end reviewing protection selections.
But some students are uncertain that’s routinely occurring.
“I think that there’s also probably a little bit of ambiguity over what constitutes ‘meaningful human review,’” mentioned Amy Killelea, an assistant analysis professor on the Center on Health Insurance Reforms at Georgetown University.
A 2023 report published by ProPublica discovered that, over a two-month interval, medical doctors at Cigna who reviewed requests for cost spent a median of only one.2 seconds on every case.
Cigna spokesperson Justine Sessions informed KFF Health News that the corporate doesn’t use AI to disclaim care or claims. The ProfessionalPublica investigation referenced a “simple software-driven process that helped accelerate payments to clinicians for common, relatively low-cost tests and treatments, and it is not powered by AI,” Sessions mentioned. “It was not used for prior authorizations.”
And but class-action lawsuits filed towards main well being insurers have alleged that flawed AI fashions undermine physician suggestions and fail to take sufferers’ distinctive wants under consideration, forcing some individuals to shoulder the monetary burden of their care.
Meanwhile, a survey of physicians published by the American Medical Association 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.”
Chris Bond, a spokesperson for the insurers’ commerce group AHIP, informed KFF Health News that the group is “zeroed in” on implementing the commitments made to the federal government. Those embrace decreasing the scope of prior authorization and ensuring that communications with sufferers about denials and appeals are straightforward to grasp.
‘This Is a Pilot’
The Medicare pilot program underscores ongoing issues about prior authorization and raises new ones.
While non-public well being insurers have been opaque about how they use AI and the extent to which they use prior authorization, coverage researchers consider these algorithms are sometimes programmed to routinely deny high-cost care.
“The more expensive it is, the more likely it is to be denied,” mentioned Jennifer Oliva, a professor on the Maurer School of Law at Indiana University-Bloomington, whose work focuses on AI regulation and well being protection.
Oliva defined in a current paper for the Indiana Law 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 prospect of the affected person dying throughout that course of will increase. The longer an attraction, the much less doubtless the well being insurer is to pay the declare, Oliva mentioned.
“The No. 1 thing to do is make it very, very difficult for people to get high-cost services,” she mentioned.
As using AI by well being insurers is poised to develop, insurance coverage firm algorithms quantity to a “regulatory blind spot” and demand extra scrutiny, mentioned Carmel Shachar, a school director at Harvard Law School’s Center for Health Law and Policy 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 mentioned. But the shortage of particulars makes it tough to find out whether or not it is going to work.
Politicians are grappling with among 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. But Democrats aren’t the one ones nervous.
Murphy, who co-chairs the House GOP Doctors Caucus, acknowledged that many physicians are involved the WISeR pilot may overreach into their observe of medication if the AI algorithm denies doctor-recommended care.
Meanwhile, House members of each events lately supported a measure proposed by Rep. Lois Frankel, a Florida Democrat, to dam funding for the pilot within the fiscal 2026 finances of the Department of Health and Human Services.
AI in well being care is right here to remain, Murphy mentioned, but it surely 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 mentioned, “but I will always, always err on the side that doctors know what’s best for their patients.”