New Jersey Medicare patients will be guinea pigs in a grand experiment that tests the capabilities of using artificial intelligence to decide which medical procedures should be covered by insurance.
The pilot program, which starts on Jan.1 and will run through Dec.31, is being implemented in six states — New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington.
The program was first announced in June by Health and Human Services Secretary Robert F.Kennedy Jr.and Dr.Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services.
They described it as a health insurance breakthrough designed to root out waste and fraud.
“Today, because of President Trump’s leadership we are agreeing to this momentous and monumental accomplishment and we hope to see the dividends of this success story immediately materialize as a better experience for hundreds of millions of American patients,” said Kennedy.
The pilot program aims to revamp the unpopular process known as prior authorization, or pre-authorization, which requires health care providers to get approval from insurers before prescribing certain medications or carrying out certain services.
Prior authorization has long been criticized as unnecessarily burdensome and frustrating by doctors and patients alike.In a nationwide survey of 1,000 physicians conducted by the American Medical Association, 24% reported that prior authorization led to an adverse event for a patient.More than nine in 10 reported prior authorization has a negative impact on patient outcomes and delays access to care.
“It’s the number one complaint not only from patients, but providers, doctors like myself, are continually struggling with this issue,” said Oz, a former talk show host who now runs the CMS, a federal agency within the Department of Health and Human Services.
By outsourcing some of the decision-making process to technology, Oz said he hopes to ease the administrative burden on providers and ensure timely payment for Medicare services.
Through the Wasteful and Inappropriate Service Reduction model, CMS will partner with private companies that specialize in enhanced technologies, like AI or machine learning, to assess coverage for select items and services delivered through Medicare.These include skin and tissue substitutes, electrical nerve stimulator implants, knee arthroscopy for knee osteoarthritis and incontinence control devices.
These items and procedures have a higher risk of waste, fraud and abuse, according to CMS.
The program excludes inpatient-only services, emergency services, and services that would pose a substantial risk to patients if significantly delayed.
Providers for people with Medicare can either submit a prior authorization request for the selected items and services, or they can go through a post-service/pre-payment medical review.
Leading medical organizations have commended the federal government’s efforts to combat waste, fraud and abuse.But they have also voiced misgivings about the program.In particular, the American Hospital Association expressed concerns regarding the participating vendor payment structure, which it says incentivizes denials at the expense of physician medical judgment.
The professional organization also raised concerns about oversight on the use of AI, oversight of vendors used by Medicare Advantage plans, expansion of the model’s scope and its implementation timeline, among other details.
According to CMS, companies participating in the program will receive “a percentage of the savings associated with averted wasteful, inappropriate care as a result of their reviews.”
However, the program does include some safeguards.Denials must be reviewed by a human clinician and can’t be performed solely by a machine.Providers, suppliers and people with Medicare will also have the ability to appeal claims decisions, as usual..
