Medicare to Launch AI-Driven Prior Authorization Pilot for Traditional Procedures

The Trump administration is set to implement a pilot program starting in January that introduces AI-driven prior authorization for certain medical procedures under traditional Medicare, expanding practices previously limited to Medicare Advantage. This pilot will take place in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington, with the aim of potentially extending nationwide.

The approach follows a smaller pilot from a decade ago that saved Medicare up to $1.9 billion over five years but was discontinued due to administrative complexity and confusion over coverage rules. With advanced AI, the government anticipates improved efficiency and cost savings in prior authorization processes, impacting one of the largest federal spending categories. The initiative aligns with broader federal efforts to control Medicare expenditures amid fiscal pressures and the need to manage the national deficit.