Can an algorithm deny your care?
Who is allowed to use AI to approve or refuse treatment coverage, and what human check is required?
Federal health agencies are expanding AI in Medicare review, a Senate attempt to repeal the Medicare pilot failed in July 2026, and AI labs sell prior-authorisation tools to insurers. States are responding with laws that limit AI in coverage decisions, some requiring a licensed clinician to make every denial. That sets up a clash with federal efforts to preempt state AI rules.
KeyStoryRule or lawAlso on another Storyline
- Senate declines to take up repeal of Medicare’s AI prior-authorisation pilot
The Senate refuses, 46 to 50, to take up a repeal of the Medicare AI pilot, so it runs on in six states.
- Washington law says only a licensed clinician can deny prior-authorisation requests
Washington requires a licensed clinician for every medical-necessity denial, one of at least seven states limiting AI in coverage decisions in 2026.
- Anthropic launches Claude for Healthcare with HIPAA-ready tools for providers and payers
Frontier labs package prior-authorisation and claims-appeal tools for payers and providers.
- Medicare starts WISeR, an AI-assisted prior-authorisation pilot in six states
Traditional Medicare begins AI-assisted prior authorisation, with vendors paid from savings.
- Rule, In forceUSState AI law preemption EO
Federal pressure to preempt state AI laws could test these state protections.
- HHS publishes department-wide AI strategy built on a ‘OneHHS’ platform
HHS commits to AI across CMS and other agencies.
- Rule, Partly in forceCaliforniaCCPA ADMT regulations
California’s automated decision-making rules add notice and opt-out duties.
Also on Who audits the hiring algorithm?
- Senate report links insurer automation to rising Medicare Advantage post-acute denials
A Senate report ties insurer automation to rising post-acute care denials.
- Rule, SupersededColoradoColorado AI Act (SB 24-205)
Colorado’s 2024 AI Act treated health-care decisions as consequential; the 2026 law that replaced it still covers health care.
Also on Washington vs the states on AI rules, Who audits the hiring algorithm?
- CMS tells Medicare Advantage plans AI cannot replace individual coverage decisions
CMS tells Medicare Advantage plans in 2024 that an algorithm can assist but not decide coverage alone.
Related developments
Connected developments not on this line
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- DevelopmentFDA gives all employees agentic AI tools after 70% take-up of Elsa1 Dec 2025, Launch, United States
- DevelopmentTrump executive order launches Genesis Mission for AI-driven science at DOE24 Nov 2025, Policy, United States
- DevelopmentFDA rolls out ‘Elsa’, a generative AI assistant for all agency staff2 Jun 2025, Launch, United States
- DevelopmentHHS bars discrimination through clinical algorithms and AI in its Section 1557 final rule26 Apr 2024, Rule change, United States
- DevelopmentFamilies sue UnitedHealth over nH Predict algorithm used in Medicare Advantage denials14 Nov 2023, Incident, United States