AI and Medicare
What's Here, What's Coming, and What's Happening Outside Your Coverage
By Jon Fitch, DeepSeek, and ChatGPT (Ironic isn’t it?)
BUT first what is AI?
It is not Google on steroids. Artificial intelligence, or AI, is not a thinking machine or a digital brain with opinions or intentions. It is a type of software trained on enormous amounts of text and data to recognize patterns and generate responses that sound human by predicting what words or ideas logically come next. In practical terms, AI is a very advanced tool for organizing information, explaining complex topics, and helping people work faster. What it is not is conscious, emotional, or capable of judgment, expertise, or personal experience. AI does not “know” things the way people do, and it cannot replace professional advice or human decision-making. Instead, it works best as an assistant, helping translate complicated systems like Medicare into clearer language while the real understanding, responsibility, and guidance still come from knowledgeable humans. As you may have noticed, I use it with content creation because it can read thousands of articles, which I don’t have the time or resources for. If there are typos or lost thoughts, that’s usually me.
Now, if you've picked up a newspaper or scrolled through news feeds lately, you've probably seen headlines about artificial intelligence transforming healthcare. But if you're like most Medicare beneficiaries, you might be wondering: What does this actually mean for me and my coverage?
It's an excellent question—and the answer is more complex than a simple "AI is coming" or "don't worry about it."
The truth is that AI is reshaping healthcare in multiple ways, on multiple tracks. Some developments will directly affect your Medicare coverage. Others will change how your doctors practice medicine. And a surprising number are happening entirely outside the Medicare system—in consumer apps, employer benefits, and hospital back offices.
Understanding all three layers is the key to understanding your healthcare future.
Let's break it down.
Part One: What's Already Happening Inside Medicare
Let's start with the changes that could directly affect your coverage. These aren't distant possibilities—they're programs launching now.
The WISeR Model: AI-Powered Prior Authorization
What It Is: The Wasteful and Inappropriate Service Reduction (WISeR) Model is a CMS pilot program launching in January 2026 in select states. It introduces AI-powered prior authorization for specific services in Traditional Medicare—a fundamental shift for a program that has historically operated without such requirements.
How It Works: When a provider requests authorization for one of 17 targeted services (including knee arthroscopy for osteoarthritis and certain skin substitutes), AI technology from partners like Humata Health instantly reviews the request. The AI matches documentation against Medicare rules and can approve straightforward cases within seconds.
Here's the crucial safeguard: the AI can only say yes. Any case that raises questions, lacks documentation, or falls into gray areas is automatically escalated to a human reviewer.
Why It Matters: If successful, this model could expand dramatically. Imagine a Medicare system where routine approvals happen instantly, where providers spend less time on paperwork and more time with patients, and where taxpayer dollars aren't wasted on clearly inappropriate services.
But critics raise legitimate concerns. The model compensates private vendors based on "averted expenditures"—essentially, savings from denied or reduced care. Does this create a financial incentive to deny care, even with human oversight? It's a question that will be closely watched as the pilot unfolds.
What It Means for You: If this pilot succeeds, similar approaches could eventually reach beneficiaries across the country. If it fails—if beneficiaries experience inappropriate denials or delays—it will serve as a cautionary tale.
Fighting Fraud with Algorithms
Beyond prior authorization, there's a broader push to use AI for system integrity. The bipartisan Medicare Transaction Fraud Prevention Act proposes using predictive algorithms to assign risk scores to claims for durable medical equipment and lab tests. High-risk transactions would be flagged for human inspectors.
The goal? Catching fraud before money leaves the Treasury—a particular concern in areas like skin substitutes, where Medicare spending ballooned 640% in just two years, reaching $10 billion in 2024.
Modernizing the Beneficiary Experience
CMS is also focused on patient-facing technology. Its 2026 tech goals include promoting interoperability and increasing access to apps that help Medicare patients manage chronic conditions and use conversational AI tools. The vision includes an "app store" of vetted digital health solutions for beneficiaries.
Part Two: What's Coming for Medicare's Future
Beyond these immediate programs, a wave of AI innovations is being developed specifically for eventual integration into Medicare.
"Agentic" AI That Thinks Like a Clinician
Companies like Cohere Health are developing what they call "clinically trained agentic AI." This isn't your average rule-following algorithm. It's AI designed to use clinical reasoning—interpreting medical documentation, applying evidence-based guidelines, and making nuanced coverage determinations.
Why It Matters for Medicare: Today, coverage decisions often involve humans reviewing stacks of paper, making subjective judgments, and working through backlogs that can delay care for weeks. Agentic AI promises to handle the heavy lifting while keeping humans in the loop for final decisions.
The potential is enormous: faster approvals, more consistent decisions, and reduced administrative burden on healthcare providers who are already stretched thin. For Medicare, this could mean a system that actually works with providers rather than against them.
Creating Payment Pathways for AI Tools
For any AI tool to become a standard part of Medicare, providers need to be paid for using it. That's where legislative and regulatory innovations come in.
The Health Tech Investment Act: This bipartisan Senate bill (S. 1399) proposes creating a specific Medicare payment pathway for FDA-cleared AI-enabled medical devices. For up to five years, these devices would receive temporary payment codes, allowing CMS to gather data before assigning permanent reimbursement.
The ACCESS Model: The Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model is a 10-year CMS Innovation Center program. Instead of paying per service, it offers stable, recurring payments to organizations that use technology—including AI—to manage patients with chronic conditions. Full payment depends on demonstrated clinical improvement.
New CPT Codes: The American Medical Association is actively creating coding classifications for AI-enabled services. As of early 2026, there are already 26 CPT codes for clinical AI solutions, with three having permanent Category I status.
Why It Matters: Without payment pathways, even the most brilliant AI tools will gather dust. These efforts are laying the groundwork for AI to become a normal, expected part of medical practice—as routine as X-rays or blood tests.
The Medicare "App Store"
CMS has launched a sweeping initiative to modernize health technology, with a vision that includes something remarkable: an "app store" of vetted digital health solutions for Medicare beneficiaries.
Major tech companies—including Anthropic (creator of Claude for Healthcare) and OpenAI (with ChatGPT Health)—have signed pledges to participate in this ecosystem. The goal is to give patients secure, AI-powered access to their own health records, along with tools to manage chronic conditions, understand treatment options, and navigate the healthcare system.
Imagine this: You're managing diabetes and high blood pressure. Instead of juggling paper records, appointment cards, and medication lists, you open a secure app on your phone. An AI assistant, trained on your specific health data, answers your questions:
"What was my last A1C level, and how does it compare to three months ago?"
"I'm feeling dizzy after taking my new medication—should I be concerned?"
"Remind me when my next wellness visit is due."
Wearables That Talk to Your Doctor
Companies like Oura (known for their smart rings) are building on the CMS health tech initiative to create AI agents that combine data from wearable sensors with formal medical records.
If your sleep quality declines and your blood pressure readings trend upward, the AI might suggest a check-in with your doctor—or even flag the trend for your care team.
Why It Matters for Medicare: Chronic disease management accounts for the vast majority of Medicare spending. If AI can help patients and providers spot problems early, intervene before crises develop, and manage conditions more effectively, the savings—both financial and human—could be enormous.
AI for Quality and Data Integration
Organizations like the NCQA (National Committee for Quality Assurance) are exploring how AI can transform healthcare data management—extracting evidence from structured and unstructured data, summarizing complex medical records, and deduplicating records across different systems.
Today, your medical information might be scattered across multiple providers, each using different electronic health record systems. AI can help stitch these pieces together, creating a more complete picture of your health while reducing redundant tests and conflicting treatments.
Part Three: What's Happening Entirely Outside Medicare
Now for the fascinating part: a parallel universe of AI innovation is thriving completely outside the Medicare system. These are tools for people with private insurance, employer plans, or no insurance at all.
Direct-to-Consumer AI Health Platforms
Lotus Health AI recently raised $35 million to build a platform that makes primary care free—no insurance required. Patients upload their medical records, lab results, and wearable data. The AI aggregates this fragmented information into a single profile, analyzes it for potential issues, and flags concerns. Here's the critical part: real board-certified physicians review every AI finding before any prescription or recommendation is made.
Why does it bypass Medicare? Lotus doesn't bill insurance at all. Instead, it monetizes through "premium sponsorships" inside the app—essentially an ad-supported model borrowed from consumer tech. The company's gamble is that removing copays and deductibles will encourage people to seek care earlier, preventing costly conditions down the road.
Everlab is an Australian startup that raised $10 million to offer a membership service combining full-body MRI, DEXA scans, ECG, and continuous glucose monitoring with large-language-model "health agents." The platform interprets over a million biomarkers per member and sends personalized action plans for diet, exercise, and sleep. Early data shows one in four users receive abnormal findings, and more than one-third improve modifiable biomarkers at six-month follow-up.
Employer-Sponsored AI Benefits
HealthTap launched a virtual primary care program in August 2025 offering AI-enabled, affordable care to employers and organizations. Organizations can provide nationwide access to board-certified physicians, urgent care, chronic disease management, and mental health services—all with built-in AI tools for patient intake and decision support.
Sword Health introduced "Sword Intelligence"—AI care manager agents designed for insurance companies and healthcare providers. These AI agents automate non-clinical workflows like enrollment, triage, eligibility checks, high-risk member outreach, appointment management, and discharge planning.
Consumer-Facing AI Health Tools
According to industry analysis, the AI healthcare battleground is shifting from hospitals into daily life—homes, wearables, and smartphones. Surveys show over one-third of U.S. adults already use AI tools to understand and manage their health, but not as a "medical replacement." Common uses include:
Researching specific diseases and health questions
Planning weekly meals and recipes
Learning new exercise routines
Seeking immediate mental health support during low moments
Cross-validating health information from social media, doctors, or friends
Mental health chatbots are among the most widely adopted consumer AI health tools. Using cognitive behavioral therapy frameworks, they provide mood tracking and structured conversations. Studies show they can reduce depression symptoms by 20-40% in the short term—not replacing therapists, but providing immediate support where professional care isn't yet available.
Diabetes management AI combined with continuous glucose monitors offers real-time, personalized feedback on blood sugar trends. Some studies show AI interventions improve medication adherence by over 30% in certain populations.
CurieDx is an AI-powered mobile app developed at Johns Hopkins that lets users screen for strep throat by uploading a photo of their throat. The app compares the image to AI image databases, determines the likelihood of strep in seconds, and offers guidance on self-care and whether to see a doctor. It's named after Marie Curie and was developed by a pediatric emergency physician who put clinical work on hold to bring it to market.
Doximity rolled out a no-cost ambient AI scribe for every U.S. clinician—more than 10,000 physicians used the beta version. Early adopters report chart-closure time dropping by half. Doximity even offers complimentary onboarding for free and charitable clinics. This leaves more time for patient care.
Incredible Health created two AI voice agents—Gale and Lyn—designed to help healthcare workers and employers with hiring. Healthcare workers use Gale to refine resumes, prepare for interviews, and find opportunities. Employers use Lyn as an AI voice interview agent for candidate outreach. Over 1 million U.S. healthcare workers have used Gale.
Hospital Operations AI
Leading health systems like Stanford and Cleveland Clinic are finding transformative value in AI for administrative, operational, and support functions. Examples include:
Forecasting operating room cases 100 days in advance to anticipate supply needs and staffing
AI-driven scheduling tools optimizing hospital staffing
Predictive analytics for equipment maintenance and facilities management
Automating repetitive tasks like meal delivery via robotic assistants (maybe your meal will be delivered hot)
PocketHealth's Conductor AI is an "agentic AI" system that automates every non-clinical step of care—from requisition intake and order creation to scheduling and appointment confirmations. For a regional imaging system, it's expected to reclaim hundreds of staff hours monthly.
Research and Open-Source AI
University of Colorado researchers demonstrated that free, open-source AI tools can help doctors report medical scans just as well as expensive commercial systems—without sending patient data to outside servers. Researchers created 3,000 synthetic (fake) radiology reports to train AI models, then tested them on real patient data. One open-source model, Yi-34B, performed as well as GPT-4.
This is research and development—creating tools that hospitals can run inside their own secure systems, avoiding privacy concerns and subscription costs. The approach could eventually be used for CT reports, medical notes, and tracking disease progression.
The Big Picture: Two Parallel Universes
What emerges from this landscape is a fascinating picture: AI in healthcare is developing along two distinct tracks.
Medicare-Facing AI
Subject to federal policy and regulation
Focused on cost control, fraud prevention, prior-authorizations
Impacts beneficiaries directly
Examples: WISeR Model, AI payment pathways, Medicare "app store"
Non-Medicare AI
Driven by market forces and consumer demand
Focused on convenience, wellness, and efficiency
Impacts consumers, employees, and healthcare workers
Examples: Lotus Health, Everlab, CurieDx, Doximity scribe
For Medicare beneficiaries, this distinction matters because:
It shows the breadth of AI's impact. Medicare changes aren't happening in a vacuum—they're part of a much larger transformation.
It highlights different incentives. Medicare AI focuses on protecting the Trust Fund and reducing waste. Consumer AI focuses on user experience and engagement. Both are valid, but they serve different masters.
It points to possible futures. Some consumer tools may eventually seek Medicare reimbursement. Some operational efficiencies may filter into Medicare Advantage plans. The boundaries aren't permanent.
The Great Debate: Innovation vs. Protection
No discussion of AI in Medicare is complete without acknowledging the very real concerns that accompany these developments.
The Case for AI:
Protecting the Trust Fund: By reducing waste and inappropriate care, AI can help ensure Medicare exists for future generations.
Faster Decisions: AI can process routine requests in seconds rather than weeks.
Better Insights: AI can analyze patterns humans might miss, leading to improved care coordination and outcomes.
The Concerns:
Incentives to Deny Care: When vendors are compensated based on "averted expenditures," the profit motive conflicts with patient care.
The "Black Box" Problem: If AI recommendations aren't transparent, how can patients appeal or understand decisions affecting their health?
Loss of Human Connection: Healthcare is fundamentally human. Will AI enhance that humanity or erode it?
Equity Gaps: Paywalled AI health tools could widen disparities if they remain available only to those who can afford them.
These aren't abstract debates. They're questions that will be answered in the coming years—and the answers will affect every Medicare beneficiary.
What This Means for You Today
After reading about all these developments, you might be wondering: What should I do with this information? How does it affect me right now?
Here's my advice:
Stay informed, but don't worry. Most Medicare-facing projects are in pilot phases or early development. For the typical beneficiary, there's no immediate change to your Medicare coverage. The system you know today will be the system you experience tomorrow.
Understand your rights. If AI ever becomes involved in coverage decisions affecting you, remember: AI cannot make final decisions. A human must always be involved. You have appeal rights if care is denied.
Embrace tools that help you. As the CMS "app store" and other patient-facing tools become available, consider using them. Knowledge is power, and having better access to your health information can only help you make informed decisions.
Don't feel you're missing out on consumer AI. These non-Medicare tools aren't "better" options you should be seeking—they're different tools for different contexts. If a tool interests you and you can afford it, fine. But there's no pressure to chase every new app or device.
Ask questions. If your provider mentions using AI in your care, ask about it. How does it work? What data does it use? Who's ultimately responsible for decisions? Good providers will welcome these questions.
The Bottom Line
AI is transforming healthcare on multiple fronts—inside Medicare, coming to Medicare, and entirely outside Medicare. Understanding all three layers helps you separate hype from reality, opportunity from risk.
What it means to you:
AI isn’t going anywhere.
AI can do things that we (humans) can’t do as well.
AI is NOT making final decisions!
Key Terms to Know
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CMS pilot program using AI for prior authorization in Traditional Medicare.
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AI that uses clinical reasoning, not just rule-following.
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Billing codes that determine how medical services are reimbursed.
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A data standard that allows different health IT systems to communicate.
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Payment program for technology-enabled chronic care management.
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Proposed law creating Medicare payment pathways for AI devices.
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Health tools you use independently, without involving insurance.
At MainelyMedicareHelp.com, my mission is to help you navigate these changes with confidence. I'll continue monitoring developments, translating complex policy into plain language, and advocating for a Medicare system that puts beneficiaries first. Because no matter how sophisticated the technology becomes, Medicare's purpose remains the same: providing healthcare security for the Americans who've earned it.
Have questions about how these changes might affect your Medicare coverage—or wondering if any consumer AI tools could benefit you? Contact me at EMAIL or TEXT, I’m here to help you navigate every twist and turn in the road ahead.
Jon Fitch is a Medicare Advisor with MainelyMedicareHelp.com, dedicated to helping beneficiaries understand their healthcare options. With 12 years of experience in Medicare navigation, I specialize in translating complex policy into practical guidance.
This info is good as of today 2/24/2026, and based on the 10 different AI newsletters I get, everything is changing daily! This is a snapshot, and where we are 6 months from now will surely be a different place. Policies and regulation may affect future realities!
