Medicare launches AI pilot to deny treatment claims
Medicare launched a six-year AI pilot program in January 2026 to automatically approve or deny prior authorization requests for 14 types of medical procedures and devices in six states. Health experts warn the system could delay or block necessary care for traditional Medicare beneficiaries, though the pilot is designed to test whether it should be expanded nationwide.
What happened
Medicare launched a six-year pilot program called the Wasteful and Inappropriate Service Reduction Model in January 2026, affecting traditional Medicare beneficiaries in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington.
The pilot requires medical providers to obtain prior authorization from AI software before delivering 14 types of health procedures and devices, including steroid injections for pain management and incontinence-control devices. The AI identifies treatment requests it deems unnecessary or harmful and denies them.
Reported impact
Health economists studying the program note there is a risk that prior authorization requirements could delay or interfere with some necessary care. The program could potentially harm the health of traditional Medicare patients despite potentially reducing wasteful spending.
Index analysis
Traditional Medicare has not historically required prior authorization, unlike Medicare Advantage plans administered by private companies. The shift to AI-based authorization represents a dramatic change in how treatment decisions are made for over 30 million beneficiaries in traditional Medicare.
Governance controls
The pilot is designed as a test on a limited population to determine whether the approach should be implemented more broadly. The program runs for six years until December 2031, with the Centers for Medicare & Medicaid Services evaluating whether to expand it based on outcomes.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.