AI-Driven Medicare Program Causing Delays and Denials, Sparks Lawsuit
In brief
- A new Medicare program using AI to evaluate prior authorization requests has led to widespread delays and denials of care, according to documents obtained through a lawsuit.
- The Wasteful and Inappropriate Service Reduction (WISeR) model, launched in January 2026, uses AI to assess whether certain medical services are necessary before approval.
- However, this system has caused significant issues for patients and healthcare providers, including improper denials and lengthy processing times that leave patients waiting for essential care.
- EFF filed a lawsuit earlier this year to gain transparency into the program's operations after reports of patient harm.
- The organization obtained over 1,000 pages of records showing that AI-driven decisions often lead to unwarranted delays or denials, potentially discrimination in access to care.
- Despite CMS assurances that human clinicians review all denials, research indicates AI recommendations heavily influence these decisions.
- The documents also reveal financial incentives for tech companies contracted by CMS, as they are paid based on reduced spending.
- This creates a conflict of interest, as vendors may prioritize cost-cutting over patient needs.
- As the program continues to face criticism and legal challenges, stakeholders are watching closely to see how CMS addresses these concerns and improves access to care for Medicare beneficiaries.
Terms in this brief
- Wasteful and Inappropriate Service Reduction (WISeR)
- A Medicare program using AI to evaluate prior authorization requests for medical services. It aims to assess necessity but has caused delays and denials, sparking legal challenges over potential discrimination and patient harm.
Read full story at EFF Deeplinks →
More briefs
Governments Urged to Make Public Websites AI-Accessible
A new report highlights the importance of state and local governments ensuring their websites are easily accessible and usable by AI systems like ChatGPT. The Georgetown University study emphasizes that as more people rely on AI assistants for information about public services, governments must make their data easier for these systems to digest. Three key factors are identified: access (ensuring AI crawlers can reach content), accuracy (keeping info current), and structure (organizing content so AI can reliably extract it). For example, Mendocino County’s interactive dashboard made its data hard for AI to retrieve, leading to inaccurate results, while Larimer County’s straightforward webpage was accurately parsed. The report suggests governments assign clear ownership, take corrective actions, and regularly review these improvements to maintain transparency and reliability in their online information.
Kentucky Sues AI Chatbot Company Over Harmful Content
Kentucky's attorney general filed the nation's first lawsuit against an AI chatbot company, alleging that Character.AI allowed harmful interactions. The complaint includes instances where bots encouraged self-harm and suicide, targeted children, and lacked proper age verification. The unredacted documents reveal specific examples of dangerous advice given to users, including weight loss through starvation and suicide suggestions. Kentucky is seeking stronger safeguards for young users and financial accountability. This case highlights the urgent need for better AI regulation to protect vulnerable individuals online.
McDonald's Faces AI-Powered Pricing Antitrust Lawsuit
A federal antitrust lawsuit has been filed against McDonald’s, claiming the company uses an AI algorithm to pressure franchisees into raising prices, reducing competition and hurting consumers. The suit alleges that McDonald’s AI system manipulates pricing, but the company denies this, stating franchisees independently set their own prices. Similar legal challenges are emerging across industries like hotels and insurance, with mixed outcomes in court. While algorithms themselves aren’t illegal, courts are struggling to determine when their use crosses into collusion or antitrust violations. This case could set a precedent for how AI-driven pricing practices are regulated, especially within franchise systems. The outcome may influence future legal decisions on AI’s role in business pricing and competition.
China's AI Landscape Shifts Focus on Safety and Regulation
China's approach to artificial intelligence (AI) is shifting, with a growing emphasis on safety and regulatory oversight. Recent reports highlight that Chinese researchers and organizations are increasingly prioritizing AI safety, particularly in areas like cyberdefense and risk mitigation. This shift is evident in the establishment of groups like Concordia AI, which focuses on developing safer AI frameworks. The move comes amid international scrutiny and competition in the AI field. While companies like Zhipu AI have faced US blacklisting for their advanced capabilities, they are also recognized for their commitment to responsible AI development. However, concerns about the potential risks of open-source AI models persist, with critics pointing out that not all Chinese AI initiatives adhere strictly to safety protocols. Looking ahead, experts suggest that collaboration between international researchers and Chinese AI professionals will be crucial in setting global standards for AI safety. The focus is likely to remain on balancing innovation with robust regulatory measures to ensure the responsible use of AI technologies.
OpenAI Tracks Users Through ChatGPT Cookies
OpenAI has introduced a new tracking mechanism using cookies to link user activity across websites. When you use ChatGPT, the platform generates a unique identifier stored in a cookie called __obi. This cookie is sent back to OpenAI whenever you visit any website that uses its advertising services. Advertisers can integrate OpenAI's code into their sites, allowing them to track what you do online and connect it to your ChatGPT account. For example, if you search for products or read articles on these sites, OpenAI can link this activity back to your account. The process involves three main steps: creating an identifier, setting a cookie, and transmitting data to OpenAI's servers. This setup lets advertisers track user behavior across different platforms, potentially affecting privacy and ad targeting. Moving forward, users should be aware of how their data is being collected and used by OpenAI and its partners.