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September 25, 2025
KFF Well being Information: AI Will Quickly Have a Say in Approving or Denying Medicare Therapies
Taking a web page from the non-public insurance coverage trade’s playbook, the Trump administration will launch a program subsequent 12 months to learn the way 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 group to hunt insurance coverage approval earlier than continuing with sure procedures, checks, and prescriptions. It can have an effect on Medicare sufferers, and the medical doctors and hospitals who take care of 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 specialists. The standard model of Medicare, which covers adults 65 and older and a few folks with disabilities, has largely 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 Junesimply days after the Trump administration unveiled a voluntary effort by non-public well being insurers to revamp and scale back their very own use of prior authorization, which causes care to be “considerably delayed,” mentioned Mehmet Oz, administrator of the Facilities for Medicare & Medicaid Providers.
“It erodes public belief within the well being care system,” Oz instructed the media. “It’s one thing that we will’t tolerate on this administration.”
However some critics, like Vinay Rathi, an Ohio State College physician and coverage researcher, have accused the Trump administration of sending combined messages.
On one hand, the federal authorities needs to borrow cost-cutting measures utilized by non-public insurance coverage, he mentioned. “On the opposite, it slaps them on the wrist.”
Administration officers are “speaking out of either side of their mouth,” mentioned Rep. Suzan DelBene, a Washington Democrat. “It’s vastly regarding.”
Sufferers, medical doctors, and different lawmakers have additionally been crucial of what they see as delay-or-deny techniqueswhich may decelerate or block entry to care, inflicting irreparable hurt and even loss of life.
“Insurance coverage corporations have put it of their mantra that they may take sufferers’ cash after which do their damnedest to disclaim giving it to the individuals who ship care,” mentioned Rep. Greg Murphy, a North Carolina Republican and a urologist. “That goes on in each insurance coverage firm 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 capturing loss of life of UnitedHealthcare’s CEO led many to anoint his alleged killer as a folks hero.
And the general public broadly dislikes the follow: Almost three-quarters of respondents thought prior authorization was a “main” downside in a July ballot revealed by KFFa well being data nonprofit that features KFF Well being Information.
Certainly, Oz mentioned throughout his June press convention that “violence within the streets” prompted the Trump administration to tackle the problem of prior authorization reform within the non-public insurance coverage trade.
Nonetheless, the administration is increasing the usage of prior authorization in Medicare. CMS spokesperson Alexx Pons mentioned each initiatives “serve the identical aim of defending sufferers and Medicare {dollars}.”
Unanswered Questions
The pilot programWISeR — quick for “Wasteful and Inappropriate Service Discount” — will take a look at the usage of an AI algorithm in making prior authorization selections 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 verify by prior authorization.
Different procedures could also be added to the record. However companies which are inpatient-only, emergency, or “would pose a considerable danger to sufferers if considerably delayed” wouldn’t be topic to the AI mannequin’s evaluation, in keeping with the federal announcement.
Whereas the usage of 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 companies. However specialists who’ve studied the plan consider the federal pilot might change that.
Pons instructed KFF Well being Information that no Medicare request can be denied earlier than being reviewed by a “certified human clinician,” and that distributors “are prohibited from compensation preparations tied to denial charges.” Whereas the federal government says distributors can be rewarded for financial savings, Pons mentioned a number of safeguards will “take away any incentive to disclaim medically acceptable care.”
“Shared financial savings preparations imply that distributors financially profit when much less care is delivered,” a construction that may create a robust incentive for corporations to disclaim medically crucial care, mentioned Jennifer Brackeen, senior director of presidency affairs for the Washington State Hospital Affiliation.
And medical doctors and coverage specialists say that’s just one concern.
Rathi mentioned the plan “shouldn’t be totally fleshed out” and depends on “messy and subjective” measures. The mannequin, he mentioned, in the end will depend on contractors to evaluate their very own outcomes, a selection that makes the outcomes probably suspect.
“I’m unsure they know, even, how they’re going to determine whether or not that is serving to or hurting sufferers,” he mentioned.
Pons mentioned the usage of AI within the Medicare pilot can be “topic to strict oversight to make sure transparency, accountability, and alignment with Medicare guidelines and affected person safety.”
“CMS stays dedicated to making sure that automated instruments help, not exchange, clinically sound decision-making,” he mentioned.
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 corporations have additionally insisted that people, not computer systems, are in the end reviewing protection selections.
However some students are uncertain that’s routinely occurring.
“I feel that there’s additionally in all probability slightly little bit of ambiguity over what constitutes ‘significant human evaluation,’” mentioned Amy Killelea, an assistant analysis professor on the Middle on Well being Insurance coverage Reforms at Georgetown College.
A 2023 report revealed by ProPublica discovered that, over a two-month interval, medical doctors at Cigna who reviewed requests for cost spent a mean of only one.2 seconds on every case.
Cigna spokesperson Justine Classes instructed KFF Well being Information that the corporate doesn’t use AI to disclaim care or claims. The ProPublica investigation referenced a “easy software-driven course of that helped speed up funds to clinicians for frequent, comparatively low-cost checks and coverings, and it isn’t powered by AI,” Classes 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 folks to shoulder the monetary burden of their care.
In the meantime, a survey of physicians revealed by the American Medical Affiliation in February discovered that 61% suppose AI is “growing prior authorization denials, exacerbating avoidable affected person harms and escalating pointless waste now and into the long run.”
Chris Bond, a spokesperson for the insurers’ commerce group AHIP, instructed KFF Well being Information that the group is “zeroed in” on implementing the commitments made to the federal government. These 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 considerations 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 consider these algorithms are sometimes programmed to robotically deny high-cost care.
“The dearer it’s, the extra possible it’s to be denied,” mentioned 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 predicted to die inside just a few years, well being insurers are “motivated to depend 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 possible the well being insurer is to pay the declare, Oliva mentioned.
“The No. 1 factor to do is make it very, very tough for folks to get high-cost companies,” she mentioned.
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, mentioned Carmel Shachar, a college director at Harvard Regulation Faculty’s Middle for Well being Regulation and Coverage Innovation.
The WISeR pilot is “an fascinating step” towards utilizing AI to make sure that Medicare {dollars} are buying high-quality well being care, she mentioned. However the lack of particulars makes it tough to find out whether or not it’ll work.
Politicians are grappling with a number of the identical questions.
“How is that this being examined within the first place? How are you going to make it possible for it’s working and never denying care or producing larger charges 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 apprehensive.
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 medication if the AI algorithm denies doctor-recommended care.
In the meantime, Home members of each events not too long ago supported a measure proposed by Rep. Lois Frankela Florida Democrat, to dam funding for the pilot within the fiscal 2026 funds of the Division of Well being and Human Providers.
AI in well being care is right here to remain, Murphy mentioned, nevertheless 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.
“It is a pilot, and I’m open to see what’s going to occur with this,” Murphy mentioned, “however I’ll at all times, at all times err on the aspect that medical doctors know what’s finest for his or her sufferers.”
By Laure’s Sausers and Darius Tahir
KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is among the core working packages at KFF—an unbiased supply of well being coverage analysis, polling, and journalism. Be taught extra about Kff.
