The US government is preparing to trial the use of artificial intelligence, large language models, and machine learning in a prior authorization review process for medical procedures under the Medicare program.

The New York Times reports (Reed Abelson and Teddy Rosenbluth, “Medicare Will Require Prior Approval for Certain Procedures,” NY Times, August 28, 2025):

“The federal government plans to hire private companies to use artificial intelligence to determine whether patients would be covered for some procedures, like certain spine surgeries or steroid injections. Similar algorithms used by insurers have been the subject of several high-profile lawsuits, which have asserted that the technology allowed the companies to swiftly deny large batches of claims and cut patients off from care in rehabilitation facilities.

“The A.I. companies selected to oversee the program would have a strong financial incentive to deny claims. Medicare plans to pay them a share of the savings generated from rejections.

“The government said the A.I. screening tool would focus narrowly on about a dozen procedures, which it has determined to be costly and of little to no benefit to patients. Those procedures include devices for incontinence control, cervical fusion, certain steroid injections for pain management, select nerve stimulators and the diagnosis and treatment of impotence.”

The Times notes further:

“The program, called the Wasteful and Inappropriate Service Reduction Model, is already drawing opposition from Democratic lawmakers, former Medicare officials, physician groups and others.

“Patients are also leery. ‘I think it’s the back door into privatizing traditional Medicare,’ Ms. Ayres said.

“People enrolled in traditional Medicare who live in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington State will be included in the experiment, which is expected to start in January and last for six years.

“Dr. Vinay Rathi, an Ohio surgeon and an expert in Medicare payment policy, warned that the experiment could recreate the same hurdles that exist with Medicare Advantage, where people enroll in private plans. ‘It’s basically the same set of financial incentives that has created issues in Medicare Advantage and drawn so much scrutiny,’ he said. ‘It directly puts them at odds with the clinicians.’

“Typically, these A.I. models scan a patient’s records to determine if a requested procedure meets an insurer’s criteria. For instance, before authorizing back surgery, the system might search for proof that a patient first tried physical therapy or received an MRI showing a bulging disc.”

World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems and policies in the US and sixteen other OECD member nations.

Page last updated September 23, 2025 by Doug McVay, Editor.