Darius Tahir, Kaiser Health News

Taking a page from the private insurance industry’s playbook, the Trump administration will launch a program next year to find out how much money an artificial intelligence algorithm could save the federal government by denying care to Medicare patients.

The pilot program, designed to weed out wasteful, “low-value” services, amounts to a federal expansion of an unpopular process called prior authorization, which requires patients or someone on their medical team to seek insurance approval before proceeding with certain procedures, tests, and prescriptions. It will affect Medicare patients, and the doctors and hospitals who care for them, in Arizona, Ohio, Oklahoma, New Jersey, Texas, and Washington, starting Jan. 1 and running through 2031.

The move has raised eyebrows among politicians and policy experts. The traditional version of Medicare, which covers adults 65 and older and some people with disabilities, has mostly eschewed prior authorization. Still, it is widely used by private insurers, especially in the Medicare Advantage market.

And the timing was surprising: The pilot was announced in late June, just days after the Trump administration unveiled a voluntary effort by private health insurers to revamp and reduce their own use of prior authorization, which causes care to be “significantly delayed,” said Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services.

“It erodes public trust in the health care system,” Oz told the media. “It’s something that we can’t tolerate in this administration.”

But some critics, like Vinay Rathi, an Ohio State University doctor and policy researcher, have accused the Trump administration of sending mixed messages.

On one hand, the federal government wants to borrow cost-cutting measures used by private insurance, he said. “On the other, it slaps them on the wrist.”

Administration officials are “talking out of both sides of their mouth,” said Rep. Suzan DelBene, a Washington Democrat. “It’s hugely concerning.”

Patients, doctors, and other lawmakers have also been critical of what they see as delay-or-deny tactics, which can slow down or block access 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,” said Rep. Greg Murphy, a North Carolina Republican and a urologist. “That goes on in every insurance company boardroom.”

Insurers have long argued that prior authorization reduces fraud and wasteful spending, as well as prevents potential harm. Public displeasure with insurance denials dominated the news in December, when the shooting death of UnitedHealthcare’s CEO led many to anoint his alleged killer as a folk hero.

And the public broadly dislikes the practice: Nearly three-quarters of respondents thought prior authorization was a “major” problem in a July poll published by KFF, a health information nonprofit that includes KFF Health News.

Indeed, Oz said during his June press conference that “violence in the streets” prompted the Trump administration to take on the issue of prior authorization reform in the private insurance industry.

Still, the administration is expanding the use of prior authorization in Medicare. CMS spokesperson Alexx Pons said both initiatives “serve the same goal of protecting patients and Medicare dollars.”

Unanswered Questions

The pilot program, WISeR — short for “Wasteful and Inappropriate Service Reduction” — will test the use of an AI algorithm in making prior authorization decisions for some Medicare services, including skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy.

The federal government says such procedures are particularly vulnerable to “fraud, waste, and abuse” and could be held in check by prior authorization.

Other procedures may be added to the list. But services that are inpatient-only, emergency, or “would pose a substantial risk to patients if significantly delayed” would not be subject to the AI model’s assessment, according to the federal announcement.

While the use of AI in health insurance isn’t new, Medicare has been slow to adopt the private-sector tools. Medicare has historically used prior authorization in a limited way, with contractors who aren’t incentivized to deny services. But experts who have studied the plan believe the federal pilot could change that.

Pons told KFF Health News that no Medicare request will be denied before being reviewed by a “qualified human clinician,” and that vendors “are prohibited from compensation arrangements tied to denial rates.” While the government says vendors will be rewarded for savings, Pons said multiple safeguards will “remove any incentive to deny medically appropriate care.”

“Shared savings arrangements mean that vendors financially benefit when less care is delivered,” a structure that can create a powerful incentive for companies to deny medically necessary care, said Jennifer Brackeen, senior director of government affairs for the Washington State Hospital Association.

And doctors and policy experts say that’s only one concern.

Rathi said the plan “is not fully fleshed out” and relies on “messy and subjective” measures. The model, he said, ultimately depends on contractors to assess their own results, a choice that makes the results potentially suspect.

“I’m not sure they know, even, how they’re going to figure out whether this is helping or hurting patients,” he said.

Pons said the use of AI in the Medicare pilot will 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 said.

Experts agree that AI is theoretically capable of expediting what has been a cumbersome process marked by delays and denials that can harm patients’ health. Health insurers have argued that AI eliminates human error and bias and will save the health care system money. These companies have also insisted that humans, not computers, are ultimately reviewing coverage decisions.

But some scholars are doubtful that’s routinely happening.

“I think that there’s also probably a little bit of ambiguity over what constitutes ‘meaningful human review,’” said Amy Killelea, an assistant research professor at the Center on Health Insurance Reforms at Georgetown University.

A 2023 report published by ProPublica found that, over a two-month period, doctors at Cigna who reviewed requests for payment spent an average of only 1.2 seconds on each case.

Cigna spokesperson Justine Sessions told KFF Health News that the company does not use AI to deny care or claims. The ProPublica 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 said. “It was not used for prior authorizations.”

And yet class-action lawsuits filed against major health insurers have alleged that flawed AI models undermine doctor recommendations and fail to take patients’ unique needs into account, forcing some people to shoulder the financial burden of their care.

Meanwhile, a survey of physicians published by the American Medical Association in February found that 61% think 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’ trade group AHIP, told KFF Health News that the organization is “zeroed in” on implementing the commitments made to the government. Those include reducing the scope of prior authorization and making sure that communications with patients about denials and appeals are easy to understand.

‘This Is a Pilot’

The Medicare pilot program underscores ongoing concerns about prior authorization and raises new ones.

While private health insurers have been opaque about how they use AI and the extent to which they use prior authorization, policy researchers believe these algorithms are often programmed to automatically deny high-cost care.

“The more expensive it is, the more likely it is to be denied,” said Jennifer Oliva, a professor at the Maurer School of Law at Indiana University-Bloomington, whose work focuses on AI regulation and health coverage.

Oliva explained in a recent paper for the Indiana Law Journal that when a patient is expected to die within a few years, health insurers are “motivated to rely on the algorithm.” As time passes and the patient or their provider is forced to appeal a denial, the chance of the patient dying during that process increases. The longer an appeal, the less likely the health insurer is to pay the claim, Oliva said.

“The No. 1 thing to do is make it very, very difficult for people to get high-cost services,” she said.

As the use of AI by health insurers is poised to grow, insurance company algorithms amount to a “regulatory blind spot” and demand more scrutiny, said Carmel Shachar, a faculty director at Harvard Law School’s Center for Health Law and Policy Innovation.

The WISeR pilot is “an interesting step” toward using AI to ensure that Medicare dollars are purchasing high-quality health care, she said. But the lack of details makes it difficult to determine whether it will work.

Politicians are grappling with some of the same 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?” asked DelBene, who signed an August letter to Oz with other Democrats demanding answers about the AI program. But Democrats aren’t the only ones worried.

Murphy, who co-chairs the House GOP Doctors Caucus, acknowledged that many physicians are concerned the WISeR pilot could overreach into their practice of medicine if the AI algorithm denies doctor-recommended care.

Meanwhile, House members of both parties recently supported a measure proposed by Rep. Lois Frankel, a Florida Democrat, to block funding for the pilot in the fiscal 2026 budget of the Department of Health and Human Services.

AI in health care is here to stay, Murphy said, but it remains to be seen whether the WISeR pilot will save Medicare money or contribute to the problems already posed by prior authorization.

“This is a pilot, and I’m open to see what’s going to happen with this,” Murphy said, “but I will always, always err on the side that doctors know what’s best for their patients.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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More than four years ago, former President Donald Trump’s administration accelerated the development and rollout of the COVID-19 vaccine.

The project, dubbed Operation Warp Speed, likely saved millions of lives. But a substantial number of Republican voters now identify as vaccine skeptics — and Trump rarely mentions what’s considered one of the great public health accomplishments in recent memory.

“The Republicans don’t want to claim it,” Trump told an interviewer in late September.

Instead, on at least 17 occasions this year, Trump has promised to cut funding to schools that mandate vaccines. Campaign spokespeople have previously said that pledge would apply only to schools with covid mandates. But speeches reviewed by KFF Health News included no such distinction — raising the possibility Trump would also target vaccination rules for common, potentially lethal childhood diseases like polio and measles.

The Trump campaign did not respond to requests for comment on this article.

Trump has presided over a landslide shift in his party’s views on vaccines, reflected this campaign season in false claims by Republican candidates during the primaries and puzzling conspiracies from prominent conservative voices. Republicans increasingly express worry about the risks of vaccines. A September 2023 poll from Politico and Morning Consult showed a narrow majority of those voters cared more about the risks than the benefits of getting inoculated.

A surge in anti-vaccine policy in statehouses has followed the rhetoric. Boston University political scientist Matt Motta, who tracks public health policy, said preliminary data shows that states enacted at least 42 anti-vaccine bills in 2023 — nearly a ninefold surge since 2019.

In some states, it has the look of a crusade: The 2024 Texas GOP platform, for example, proposes a ban on mRNA technology, the innovation behind some covid-19 vaccines that scientists believe could have significant applications for cancer care.

Last month, Trump made an appeal to anti-vaccine voters by landing the endorsement of Robert F. Kennedy Jr., one of the nation’s most prominent vaccine skeptics — and appointing him to his transition team. In a recent tour with former Fox News broadcaster Tucker Carlson, Kennedy said he was “going to be deeply involved in helping to choose the people who run FDA, NIH, and CDC.”

Trump’s outreach can be more discreet: He recently met with a delegation of vaccine-skeptical activists — including one group pushing an end to mandates and certain types of vaccines — at his New Jersey golf club; the discussion was publicized by the conservative blog “Gateway Pundit.”

Trump has options in advancing anti-vaccine goals as president, such as by sowing further doubt and undermining the federal government’s ability to make vaccine recommendations. He has promised to appoint Kennedy, along with “top experts,” to a panel exploring chronic diseases, some of which Kennedy’s nonprofit has linked to inoculations. “Nobody’s done more” to advocate for “the health of our families and our children,” Trump declared at a rally accepting Kennedy’s endorsement.

Still, it’s hard to tell how Trump’s most frequently made proposal — defunding schools that mandate vaccinations — would translate into action, said Judith Winston, former general counsel of the Department of Education during the Obama administration.

Currently, the Department of Education lacks the power to turn off public school funding all at once, she said — meaning a second Trump administration would have to take away money program by program.

And the legal basis for such a move isn’t clear. “I am unaware of any federal law that mandates school districts either provide or not provide a vaccine,” Winston said, adding it would probably require congressional action.

All 50 states have a vaccine requirement tied to school attendance.

Trump’s outreach to anti-vaccine constituencies comes as vaccine hesitancy increases and preventable disease surges. This summer, Oregon experienced its worst outbreak of measles since 1991.

The situation could get worse, said Tom Frieden, a former director of the Centers for Disease Control and Prevention: In the Nineties, during a time when vaccine skepticism also proliferated, the U.S. saw thousands of measles cases. According to the CDC, we haven’t yet returned to those bad old days — but the number of measles cases recorded this year is already quadruple that of last year.

“It was highly disruptive,” he said. “Many children who had measles ended up with hearing problems or cognitive problems that were lifelong. A small number died in this country.”

Worldwide, the disease killed over 100,000 in 2022, mostly among children under age 5, according to the World Health Organization.

Polling shows a substantial minority of Americans, concentrated in the Republican Party, hold vaccine-skeptical positions, said Harvard professor and health politics expert Robert Blendon. And skepticism about covid vaccines is blossoming into suspicion of vaccines generally among that group, he said. “It follows from this rebellion against the covid vaccine mandates.”

Vaccine opposition has divided the GOP. Florida Gov. Ron DeSantis made opposition to vaccines a core part of his ill-fated campaign for the GOP presidential nomination. In states such as Wyoming and Missouri, pitched primary campaigns centered on anti-vaccine themes this year.

Bob Onder, a physician and Republican candidate for Congress in Missouri, was accused in Facebook ads placed by his top opponent of taking millions from pharmaceutical companies to test vaccines. “He profited from our pain,” one ad said. “You suffered the consequences.”

Onder “has never done covid vaccine research” and opposes covid vaccine mandates, his campaign manager, Charley Lovett, told KFF Health News. (Lovett said Onder “conducted” one study sponsored by AstraZeneca on preventing covid in high-risk patients using monoclonal antibodies, not vaccines.)

Onder won the Republican primary, but his vaccine-disparaging opponent still scored just over 37% of the vote.

Anti-vaccine candidates typically become anti-vaccine policymakers. The impact can be seen in Texas, where vaccine politics were once a bipartisan matter. According to researchers, from 2009 to 2019, legislators there passed 19 pro-vaccine bills, such as a measure allowing pharmacists to administer immunizations.

But that consensus began to shift toward the end of the decade. Small groups, often nurtured on Facebook, made their influence felt. One such group, Texans for Vaccine Choice, spurred testimony before the state legislature in 2021 and targeted pro-immunization legislators, some of whom fell in their GOP primaries.

Misinformation has fueled the anti-vaccine turn in Texas, alongside traditional conservative attitudes about individual autonomy, said Summer Wise, a former executive committee member of the state’s Republican Party — particularly misconceptions about the use of fetal cells in vaccine development; falsified research about a link between vaccines and autism; and conspiracy theories about Bill Gates, the billionaire philanthropist who has championed vaccination.

“Politicians see vaccines as an easy foil to propagate fear among the electorate, which can then be leveraged and directed to control a voting bloc,” Wise said.

In addition to calling for a ban on mRNA technology, the Texas GOP’s 2024 platform features a laundry list of policies that could undermine vaccination, including allowing medical residents and physicians the ability to opt out of administering shots for religious reasons. It also calls for enshrining a patient’s ability to opt out of vaccine mandates in the state’s Bill of Rights.

Nationally, anti-immunization policies could take an aggressive turn under a second Trump administration.

Roger Severino, formerly head of the Department of Health and Human Services’ Office of Civil Rights and now with the Heritage Foundation, penned the health agency section of Project 2025, the Heritage Foundation-led initiative to plan for a Republican administration.

Among other ideas, the document proposes clipping CDC authority to issue vaccine or quarantine guidance of a “prescriptive” nature, targeted at schools or elsewhere.

A spokesperson for the Heritage Foundation noted Severino has said the agency’s credibility has been hurt, and it has a burden to explain “all the vaccines on the schedule being taken in combination.”

The proposal misunderstands CDC’s history and powers, said Lawrence Gostin, a public health law professor at Georgetown University. The agency “rarely if ever” makes binding recommendations, he said.

“When the next pandemic hits, we will look to CDC to offer guidance based on the best-known evidence,” he said. “We don’t want a disempowered agency in a public health emergency.”

Some Republican intellectuals have spun dystopian visions surrounding vaccines. Take “Dawn’s Early Light,” a yet-to-be-published book by Heritage president Kevin Roberts. The tome — which earned a glowing foreword by Republican vice presidential nominee J.D. Vance — reserves especially sharp words for vaccines.

In one section of the book, Roberts imagines that the federal government would somehow use alleged new capabilities to “deplatform drivers” of cars for “failing to follow the latest vaccine mandate.”

“Yet another powerful tool of social control falls into place,” he wrote.

This report was published through a partnership between KFF Health News and the Civic News Company’s Healthbeat. Healthbeat is a nonprofit newsroom covering public health. Sign up for its newsletters here. KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — an independent source of health policy research, polling, and journalism. Learn more about KFF and subscribe to KFF Health News’ free Morning Briefing.

Early in the morning of Feb. 21, Change Healthcare, a company unknown to most Americans that plays a huge role in the U.S. health system, issued a brief statement saying some of its applications were “currently unavailable.”

By the afternoon, the company described the situation as a “cyber security” problem.

Since then, it has rapidly blossomed into a crisis.

The company, recently purchased by insurance giant UnitedHealth Group, reportedly suffered a cyberattack. The impact is wide and expected to grow. Change Healthcare’s business is maintaining health care’s pipelines — payments, requests for insurers to authorize care, and much more. Those pipes handle a big load: Change says on its website, “Our cloud-based network supports 14 billion clinical, financial, and operational transactions annually.”

Initial media reports have focused on the impact on pharmacies, but techies say that’s understating the issue. The American Hospital Association says many of its members aren’t getting paid and that doctors can’t check whether patients have coverage for care.

But even that’s just a slice of the emergency: CommonWell, an institution that helps health providers share medical records, information critical to care, also relies on Change technology. The system contained records on 208 million individuals as of July 2023. Courtney Baker, CommonWell marketing manager, said the network “has been disabled out of an abundance of caution.”

“It’s small ripple pools that will get bigger and bigger over time, if it doesn’t get solved,” Saad Chaudhry, chief digital and information officer at Luminis Health, a hospital system in Maryland, told KFF Health News.

Here’s what to know about the hack:

Who Did It?

Media reports are fingering ALPHV, a notorious ransomware group also known as Blackcat, which has become the target of numerous law enforcement agencies worldwide. While UnitedHealth Group has said it is a “suspected nation-state associated” attack, some outside analysts dispute the linkage. The gang has previously been blamed for hacking casino companies MGM and Caesars, among many other targets.

The Department of Justice alleged in December, before the Change hack, that the group’s victims had already paid it hundreds of millions of dollars in ransoms.

Is This a New Problem?

Absolutely not. A study published in JAMA Health Forum in December 2022 found that the annual number of ransomware attacks against hospitals and other providers doubled from 2016 to 2021.

“It’s more of the same, man,” said Aaron Miri, the chief digital and information officer at Baptist Health in Jacksonville, Florida.

Because the assaults disable the target’s computer systems, providers have to shift to paper, slowing them down and making them vulnerable to missing information.

Further, a study published in May 2023 in JAMA Network Open examining the effects of an attack on a health system found that waiting times, median length of stay, and incidents of patients leaving against medical advice all increased — at neighboring emergency departments. The results, the authors wrote, mean cyberattacks “should be considered a regional disaster.”

Attacks have devastated rural hospitals, Miri said. And wherever health care providers are hit, patient safety issues follow.

What Does It Mean for Patients?

Year after year, more Americans’ health data is breached. That exposes people to identity theft and medical error.

Care can also suffer. For example, a 2017 attack, dubbed “NotPetya,” forced a rural West Virginia hospital to reboot its operations and hit pharma company Merck so hard it wasn’t able to fulfill production targets for an HPV vaccine.

Because of the Change Healthcare attack, some patients may be routed to new pharmacies less affected by billing problems. Patients’ bills may also be delayed, industry executives said. At some point, many patients are likely to receive notices their data was breached. Depending on the exact data that has been pilfered, those patients may be at risk for identity theft, Chaudhry said. Companies often offer free credit monitoring services in those situations.

“Patients are dying because of this,” Miri said. Indeed, an October preprint from researchers at the University of Minnesota found a nearly 21% increase in mortality for patients in a ransomware-stricken hospital.

How Did It Happen?

The Health Information Sharing and Analysis Center, an industry coordinating group that disseminates intel on attacks, has told its members that flaws in an application called ConnectWise ScreenConnect are to blame. Exact details couldn’t be confirmed.

It’s a tool tech support teams use to remotely troubleshoot computer problems, and the attack is “apparently fairly trivial to execute,” H-ISAC warned members. The group said it expects additional victims and advised its members to update their technology.

However, there’s uncertainty about how the attack happened. ConnectWise said in a statement that it is unaware of any connection to the breach and that its internal reviews have “yet to identify Change Healthcare as a ScreenConnect customer, and none of our extensive network of managed service providers have come forward with any information regarding their association with Change Healthcare.”

When the attack first hit, the AHA recommended its members disconnect from systems both at Change and its corporate parent, UnitedHealth’s Optum unit. That would affect services ranging from claims approvals to reference tools.

Millions of Americans see physicians and other practitioners employed by UnitedHealth and are covered by the company’s insurance plans.

UnitedHealth has said only Change’s systems are affected and that it’s safe for hospitals to use other digital services provided by UnitedHealth and Optum, which include claims filing and processing systems.

But not many chief information officers “are jumping to reconnect,” Chaudhry said. “It’s an uneasy feeling.”

Miri says Baptist is using the conglomerate’s technology and that he trusts UnitedHealth’s word that it’s safe.

Where’s the Federal Government?

Neither executive was sanguine about the future of cybersecurity in health care. “It’s going to get worse,” Chaudhry said.

“It’s a shame the feds aren’t helping more,” Miri said. “You’d think if our nuclear infrastructure were under attack the feds would respond with more gusto.”

While the departments of Justice and State have targeted the ALPHV group, the government has stayed behind the scenes more in the aftermath of this attack. Chaudhry said the FBI and the Department of Health and Human Services have been attending calls organized by the AHA to brief members about the situation.

Miri said rural hospitals in particular could use more funding for security and that agencies like the Food and Drug Administration should have mandatory standards for cybersecurity.

There’s some recognition among officials that improvements need to be made.

“This latest attack is just more evidence that the status quo isn’t working and we have to take steps to shore up cybersecurity in the health industry,” said Sen. Mark Warner (D-Va.), the chair of the Senate Select Committee on Intelligence and a longtime advocate for stronger cybersecurity, in a statement to KFF Health News.

[Update: This article was updated at 4:55 p.m. ET on March 1, 2024, to reflect uncertainty about how the attack happened and to include a statement from ConnectWise.]

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF. Subscribe to KFF Health News' free Morning Briefing.

About Us - KFF Health NewsKFF Health News is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KFF Health News is one of the three major operating programs at KFF. KFF is an endowed nonprofit organization providing information on health issues to the nation. KFF Health News reports on how the health […]Est. reading time6 minutes

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