AI Death Panels Or Cost Control?
Federal pilot in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington will pay private A.I. firms a cut of “savings” prompting warnings of “AI death panels” and the “very worst of private insurance.”
The Trump administration is launching a pilot program in six states that will allow artificial intelligence to help decide whether elderly Americans can receive certain medical procedures under traditional Medicare. The move has been likened by critics to the creation of “AI death panels,” with experts and advocates warning it risks importing the most unpopular practices of private insurance into the federal health program.
The pilot, officially named the Wasteful and Inappropriate Service Reduction Model, is scheduled to begin in January and last six years. It will run in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. Under the program, the Centers for Medicare and Medicaid Services will hire private companies to use A.I. tools to make “prior authorization” decisions—determinations about whether Medicare will pay for particular procedures.
According to the New York Times, the pilot will initially cover around a dozen procedures, including devices for incontinence control, cervical fusion, certain steroid injections for pain management, select nerve stimulators, and the diagnosis and treatment of impotence. Earlier this year, Medicare also came under scrutiny for spending billions of dollars on expensive “skin substitutes” of dubious value, which will now require prior authorization under the program.
Officials say the model is designed to target procedures that are either overused or potentially harmful. Abe Sutton, director of the Center for Medicare and Medicaid Innovation, explained, “Mr. Sutton said the government experiment would examine practices that were particularly expensive or potentially harmful to patients. ‘This is what prior authorization should be,’ he said.” He emphasized that “the government would not review emergency services or hospital stays.”
The administration claims that safeguards will prevent improper denials. “Government officials said that any denials would be done by ‘an appropriately licensed human clinician, not a machine.’” Sutton added that the government could penalize companies for inappropriate decisions.
But the structure of the program has drawn immediate concern. “Medicare plans to pay them a share of the savings generated from rejections,” the Times reported. Critics argue this incentive puts profit above patient care and encourages mass denials.
Dr. Vinay Rathi, an Ohio-based surgeon and expert in Medicare payment policies, warned, “It’s basically the same set of financial incentives that has created issues in Medicare Advantage and drawn so much scrutiny. It directly puts them at odds with the clinicians.”
Patients and advocates worry the model will replicate the burdens of private Medicare Advantage plans. Frances L. Ayres, a 74-year-old retired professor in Oklahoma, said she deliberately chose traditional Medicare to avoid the denials and delays that often plague Advantage enrollees. Now, she fears she will face those hurdles anyway. “I think it’s the back door into privatizing traditional Medicare,” she said.
Labor and retiree groups have also voiced opposition. The American Federation of Teachers issued a joint statement from president Randi Weingarten and Retirees Program and Policy Council co-chair Tom Murphy accusing the administration of “attempting to transform Medicare into the very worst of private insurance.” They added, “Instead of making life easier and better for older Americans, this administration is introducing extra hurdles that are burdensome to patients and often get in the way of their desperately needed treatments. And the administration is inserting private AI companies, which have a giant financial stake in the denial of care, into the doctor-patient relationship.”
Policy experts have echoed these fears. Jathan Sadowski, senior lecturer and research fellow at Monash University, wrote, “The government is hiring companies using AI to make those determinations about healthcare. This is exactly the same tactic that private insurers like UnitedHealth use to delay and deny treatment.”
Neil Patil, a senior fellow at Georgetown and former Medicare analyst, remarked, “It’s really surprising that we are taking the most unpopular part of Medicare Advantage and applying it to traditional Medicare.” David A. Lipschutz, co-director of the Center for Medicare Advocacy, called the A.I. contractors “a whole new bounty hunter.”
The American Medical Association has long opposed prior authorization requirements, writing in a letter that physicians view the practice “as one of the most burdensome and disruptive administrative requirements they face in providing quality care to patients.” Studies show that while most patients who appeal denials eventually succeed, the vast majority never appeal.
The program has already sparked political pushback. A group of House Democrats, including Representative Alexandria Ocasio-Cortez of New York, warned in a letter to officials that giving for-profit companies a “veto” over care “opens the door to further erosion of our Medicare system.”
Traditional Medicare has historically covered services more consistently than Medicare Advantage, which is administered by private insurers and now covers more than half of older Americans. But by tying payment to denial rates and inviting A.I. into the approval process, critics fear the line between the two programs is beginning to blur.
Sutton has argued that the experiment is designed to curb unnecessary spending and limit harmful procedures. “It boils down to patient harm,” he said. The administration projects the model will save several billion dollars over six years, with greater savings possible if it is expanded.
Still, experts like Rathi caution that once the framework is in place, it could be extended far beyond low-value procedures. “You’re kind of left to wonder, well, where does this lead next?” he said. “You could be running into a slippery slope.”
