The Trump administration is set to launch a pilot program next year, following the example of the private insurance sector, to evaluate potential cost savings for the federal government by denying Medicare patients medical care through an artificial intelligence (AI) algorithm.
The program aims to eliminate services deemed unnecessary or of “low value” and represents a federal expansion of the prior authorization process, a controversial practice that requires patients or doctors to obtain insurance approval before certain medical procedures, tests, or prescriptions.
This initiative will impact Medicare beneficiaries, as well as the doctors and hospitals that serve them, in Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington starting January 1st until 2031.
The announcement of this program has raised concerns among politicians and public policy experts. The traditional version of Medicare, which covers individuals aged 65 and older and some with disabilities, has typically avoided the use of prior authorization.
However, private insurers widely employ this practice, particularly in the Medicare Advantage market.
Critics, including medical professionals and lawmakers, have accused the Trump administration of sending mixed messages. While the government aims to emulate cost-saving strategies from the private sector, it also publicly criticizes such practices.
The use of prior authorization has been a contentious issue, with many stakeholders expressing worries about delayed or denied medical care, potentially leading to irreparable harm or even death.
Insurers argue that prior authorization helps combat fraud, unnecessary spending, and potential harm. However, public outrage over coverage denials has been significant, with a KFF survey in July revealing that nearly three out of four respondents view prior authorization as a serious problem.
The pilot program, named WISeR (Reduction of Inappropriate Services and Waste), will leverage an AI algorithm to make prior authorization decisions for specific Medicare services. These include skin and tissue substitutes, nerve stimulator implants, and knee arthroscopies, identified as vulnerable to fraud, waste, and abuse.
While the use of AI in healthcare insurance is not new, Medicare has been slow to adopt tools from the private sector. The pilot program could potentially change this dynamic, but concerns remain about the subjective nature of the criteria and the potential for financial incentives to influence decision-making.
The government emphasizes that all Medicare requests will undergo review by qualified clinical professionals before any denials. However, providers will receive a percentage of savings generated from avoiding unnecessary or inappropriate care, raising questions about potential conflicts of interest.
Ultimately, the efficacy and impact of AI in this pilot program are still uncertain. The use of AI algorithms in insurance has prompted calls for increased oversight and transparency to ensure patient protection and quality care.
As the healthcare landscape continues to evolve, the pilot program represents a significant step towards leveraging AI for cost savings in Medicare. However, ongoing scrutiny and evaluation will be crucial to ensure that patient care remains the top priority amid these technological advancements.
