AI-Powered Denials: An Update on Trump’s Attack on Medicare

This pilot program will be a disaster.

Earlier this year, I shared the Trump Administration’s plan to pilot an expansion of prior authorization in Medicare. Under this pilot, private contractors will use AI systems to review requests, and those contractors will be compensated based on the money saved, which, in practice, means based on the number of denials they make.

This is a bad idea for at least three reasons:

One of the strengths of traditional Medicare is that it relies on medical need as determined by the patient’s healthcare provider, not by a third-party gatekeeper. This pilot introduces a new layer of prior authorization into traditional Medicare, where it has barely existed before.

Medicare is known for having very low administrative costs, in part because it does not require a lot of prior authorization. If fully adopted, this program will increase administrative overhead.

And establishing a compensation model that rewards denials seems like a recipe for failure when it comes to ensuring seniors get the services they need.

One of the stated reasons behind introducing prior authorization is the idea that “overutilization” is driving rising costs. But the evidence has long been clear that the real driver of U.S. healthcare spending is price growth, not volume.

The pilot will take place in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The private tech companies that will run the program have already been selected. All of them have strong ties to health insurance companies.

Because of Medicare Advantage’s experience, we now have hard data on the impact of AI-driven prior authorization:

• A 2024 Senate investigation into Medicare Advantage plans found that after UnitedHealthcare, Humana, and CVS/Aetna began using predictive AI tools to manage post-acute care, their denial rates for that care rose 54% to 108%, with post-acute denials ending up three to sixteen times higher than their overall denial rates.

• A class-action lawsuit alleges that UnitedHealthcare’s tool, nH Predict, has roughly a 90% “error rate,” defined as the share of denials that are later overturned on appeal.

• A JAMA Health Forum commentary on AI and insurer denials notes that Humana ultimately reversed more than 90% of these denials on appeal — again suggesting the algorithm was systematically over-tightening coverage.

• While insurers insist a human reviews all prior authorization requests, an investigation into Cigna’s PXDX system found that medical directors denied claims in 1.2 seconds per case, without opening the patient file. Records show one Cigna doctor denied over 300,000 claims in two months using this automated process.

A bill has been introduced in Congress to stop the pilot. At this point, only Democrats have signed on, making its passage unlikely. Many provider groups and advocacy organizations have also gone on record in opposition.

Pressure is building, but it’s not yet clear if it will be enough.

What You Can Do

This pilot project, which signals a dangerous change to Medicare, is getting lost amid broader debates about ACA health policy. On an issue that isn’t receiving much national attention, a relatively small amount of constituent communication can make a real difference.

1. Call Your U.S. Representative

Because a bill has been introduced in the House of Representatives to stop the pilot, it’s important to let your Representative know where you stand.

You can reach your U.S. Representative (or Senators) through the Capitol switchboard:

📞 202-224-3121

Just ask the operator to connect you to your Representative’s office. Not sure who that is? No problem — the operator will connect you to the right office.

Your message can be very brief. Here’s a suggested script:

“Hello, I’m a constituent calling to urge my Representative to oppose Medicare’s new AI prior authorization pilot, known as WISeR. Traditional Medicare shouldn’t adopt insurance-style denials that delay or block care for seniors.”

That’s it. Even brief calls matter.

2. If You Live in One of the Six Pilot States, Contact Your Governor

The pilot will be rolled out in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington.

Governors don’t control Medicare policy, but they do have influence. When federal changes threaten access to care for seniors in their state, governors can raise concerns with CMS and Congress.

Suggested message:

“ I’m concerned about Medicare’s new AI prior authorization pilot and the risk of delayed or denied care for seniors here. I’m asking the Governor to raise these concerns with CMS and our congressional delegation.”

Governor’s office phone numbers:

• Arizona: 602-542-4331

• New Jersey: 609-292-6000

• Ohio: 614-466-3555

• Oklahoma: 405-521-2342

• Texas: 512-463-2000

• Washington: 360-902-4111

3. Learn What This Could Mean for You — and Where to Get Help

As of now, there is no public, comprehensive list of exactly which services will be subject to prior authorization. The final list of services will be determined by the contractor in each state, in accordance with Medicare guidelines.

Medicare has determined:

• What can be included: services that meet a three-part test — patient safety concerns if delivered inappropriately, existing coverage rules, and a history of fraud, waste, or abuse.

• What is excluded: inpatient-only services, emergency services, and time-sensitive care.

In the meantime, it may be helpful to become familiar with the Medicare Rights Center, which provides counseling and assistance if you experience a delay or denial once the policy goes into effect.

This pilot is still unfolding. MurMur will continue to track developments, opposition efforts, and what this means for seniors and caregivers — especially in the six affected states.

Sources

1. Medicare WISeR Pilot (official description)
   Medicare Innovation Center, Wasteful and Inappropriate Service Reduction (WISeR) Model: https://www.cms.gov/priorities/innovation/innovation-models/wiser
   (Note: CMS administers Medicare; materials are technical and not written for beneficiaries.)

2. Center for Medicare Advocacy – WISeR explainer and critique
   Center for Medicare Advocacy, New Prior Authorization Model for Traditional Medicare: https://medicareadvocacy.org/new-prior-authorization-model-for-traditional-medicare

3. “It’s the Price, Stupid” – health care cost drivers
   Gerard F. Anderson et al., Health Affairs (2003): https://www.healthaffairs.org/doi/10.1377/hlthaff.w3.3

4. Senate investigation into AI and Medicare Advantage denials
   U.S. Senate Permanent Subcommittee on Investigations (2024)
   https://www.hsgac.senate.gov/subcommittees/investigations/reports
   (See findings on UnitedHealthcare, Humana, and CVS/Aetna use of predictive tools in post-acute care.)

5. Reporting on Senate findings and denial-rate increases
   Investopedia, summary of Senate investigation
   https://www.investopedia.com/senate-investigation-medicare-advantage-denials-8659314

6. UnitedHealthcare nH Predict lawsuit
   Class action allegations summarized in STAT News https://www.statnews.com/2023/11/14/unitedhealth-algorithm-lawsuit-medicare-advantage/

7. JAMA Health Forum – AI and insurer denials
   JAMA Health Forum commentary on algorithmic utilization management and appeals: https://jamanetwork.com/journals/jama-health-forum/fullarticle/2813002

8. Cigna PXDX investigation
   ProPublica, How Cigna Saves Millions by Having Its Doctors Reject Claims Without Reading Them: https://www.propublica.org/article/cigna-pxdx-medical-health-insurance-rejection-claims

9. State legislative responses to prior authorization abuses American Medical Association, Prior Authorization State Law Chart: https://www.ama-assn.org/practice-management/prior-authorization/prior-authorization-state-law-chart

10. Medicare Rights Center – help with denials and appeals: https://www.medicarerights.org