Fifty-two members of the House of Representatives and Senate this week signed a bicameral, bipartisan letter that sounded the alarm for the use of artificial intelligence (AI) and algorithmic software tools used to guide coverage decisions in Medicare Advantage (MA) plans.
The June 25 letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure said the lawmakers were concerned about MA plans’ use of prior authorization, specifically their ongoing use of AI and algorithmic software to guide coverage decisions.
“Plans continue to use AI tools to erroneously deny care and contradict provider assessment findings,” wrote Rep. Judy Chu (D-Calif.), Rep. Jerry Nadler (D-N.Y.), and Sen. Elizabeth Warren (D-Mass.) along with 45 House members and four Senators.
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A March 2023 report by STAT found several insurers use unregulated algorithms and AI tools to determine when to cut off payment for patient treatments. This leaves seniors, who have spent their lives paying into Medicare, left to either pay for their care themselves or go without it, Nadler noted in an announcement about the letter.
Late last year, families filed two separate lawsuits against United Health and Humana accusing both of using AI programs cut costs by denying post-acute care to Medicare Advantage patients. “We believe CMS must be more proactive in monitoring plans’ use of AI and algorithm-driven tools. MA plans cannot be allowed to side-step oversight by claiming that these tools are mere ‘guidance,’” the letter said. “Given that we do not know what inputs are used for the algorithms and AI tools currently being used, it is difficult to know the accuracy of the information they generate and whether the inputs comply with the regulations. Absent a prohibition on the use of such tools altogether, CMS should limit their use until a systematic evaluation can be conducted on how these tools are impacting care.”
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Earlier this year, CMS, in the 2025 MA final rule and in guidance, required MA plans to make medical necessity determinations in prior authorization based on the circumstances of the specific individual instead of relying on an algorithm or software that doesn’t account for an individual’s circumstances. For example, in a decision to terminate post-acute care services, an algorithm or software tool can be used to assist providers or MA plans in predicting a potential length of stay, but that prediction alone can’t be used as the basis to terminate post-acute care services.
Lawmakers say the actions are a positive step, but it’s unclear how CMS plans to enforce this guidance to ensure that plans do not inappropriately create barriers to care. Lawmakers urged CMS to take the following steps to prohibit the inappropriate use of prior authorization by MA plans when using AI/algorithmic software:
• Clarify the specific elements that must be contained in prior authorization denial notices.
• Establish an approval process to review AI and algorithmic tools and their inputs to ensure the integrity of their use and conduct a review of algorithm and AI tools currently being used.
• Prohibit the use of AI/algorithmic tools and software from use in coverage denials until a systematic review of their use can be completed.
• Clarify how CMS distinguishes between uses of algorithms or software that account for individual circumstances and those that do not; specify what criteria, methods, or data will be used to determine this distinction; and clarify how this requirement will be enforced and communicated to plans.
• Clarify when MA organizations can use internal coverage criteria when making medical necessity determinations for basic Medicare benefits.
• Impose a minimum time period during which MA plans cannot issue a termination notice after their prior termination decision has been reversed by a Medicare contractor.
“Medicare Advantage plans are entrusted with providing medically necessary care to their enrollees,” the lawmakers wrote. “We encourage CMS to incorporate the measures outlined above to protect Medicare beneficiaries and prevent future AI-related harms in health care.”