New program draws bipartisan criticism and concern from patients and doctors.
Shrewd labs will keep an eye on the latest Centers for Medicare & Medicaid Services (CMS) prior authorization pilot that leans on artificial intelligence (AI) to determine treatment options for Medicare patients. While the Wasteful and Inappropriate Service Reduction Model pilot (WISeR) doesn’t directly mention lab tests, staying on the pulse of this growing trend will keep labs thinking ahead on how to minimize impact on bottom line, paperwork, and workflows when these pilots infiltrate lab testing.
An article from POLITICO reported that CMS will start a pilot version of the program as early as January 2026 in six states including Ohio, Texas, Oklahoma, Ariz., N.J., and Wash. Private AI companies will assist and focus on “services that have been vulnerable to fraud, waste and abuse in the past,” the article noted. The voluntary model is slated to span six years through December 31, 2031, according to the Centers for Disease Control and Prevention (CDC).
Among the types of procedures encumbered by the pilot program are knee arthroscopy for osteoarthritis, skin and tissue substitutions, and electrical nerve stimulator implants, CMS noted. All outpatient and emergency services would currently be excluded, they added, as well as “services that would pose a substantial risk to patients if substantially delayed.”
“All recommendations for non-payment will be determined by appropriately licensed clinicians who will apply standardized, transparent, and evidence-based procedures to their review,” CMS added.
The premise of the pilot is to eliminate wasteful spending, with CMS citing 25% of US healthcare spending falling in this category. “According to the Medicare Payment Advisory Commission Medicare spent up to $5.8 billion in 2022 on unnecessary or inappropriate services with little to no clinical benefit,” their website noted.
A Sour Reception
The pilot program is receiving a less-than-warm welcome from both parties—doctors, and patients alike, Politico noted. “It’s been referred to as the AI death panel. You get more money if you’re that AI tech company if you deny more claims. That is going to lead to people getting hurt,” Greg Landsman (D-Ohio) said during the committee hearing.
Landsman noted in the article from POLITICO that a bipartisan desire to put a halt to the program exists among growing concerns about patient harm coming from the program. Landsman “called for the program to be shut down until an independent review board could be erected to review the liability questions and ensure the AI prior authorization pilot doesn’t harm patients.”
“I’m concerned that this AI model will result in denials of lifesaving care and incentivize companies to restrict care,” Frank Pallone (D-N.J.) and House Energy and Commerce Committee ranking member said at the subcommittee meeting on the use of AI in health care held on Sept. 3.
“We have pretty good evidence that prior authorization as a process itself is fraught, adding that AI’s ability to improve the process for patients remains unproven,” Michelle Mello, Stanford University health law professor and witness at the hearing, said.
Looking Ahead
The involvement of AI in healthcare will only continue, and learning what aspects positively impact healthcare versus cause damage will continue to evolve.
Worth noting, there are already two unrelated lawsuits, against UnitedHealthcare and Cigna, that challenge the safety of AI use to deny patient care, POLITICO noted in the article.
Laboratory leaders should keep their eyes open and their ears to the ground on not only the pilot but all AI healthcare trends.
Good behavior in federal prison by the disgraced founder of the now-defunct clinical laboratory company earned her the reduction in her original sentence of 11 years
Elizabeth Holmes, founder of failed clinical laboratory blood analysis company Theranos, continues to serve a lengthy term in prison after being convicted of multiple counts of fraud in 2022. However, now comes news that good behavior at her federal prison has shortened her sentence by nearly two years, according to NBC News.
The latest reduction took Holmes’ release from December 2032 to August 2032 in her “11-plus-year (135 month) prison sentence for wire fraud and conspiracy,” NBC reported, adding that Holmes, though Theranos, “defrauded investors out of hundreds of millions of dollars.”
Holmes entered FPC Bryan, a federal prison camp in Bryan, Texas, to begin serving her term in May 2023.
“Holmes had her sentence computation done within the first 30 days of arriving at Bryan,” Forbes reported. Given Good Conduct Time (GCT), Holmes was given 608 days off calculated from the start of her sentence. “If she were to incur a disciplinary infraction, some of those days can be taken away. Most all prisoners receive 54 days per year of GCT based on the sentence imposed,” Forbes added.
The Federal Bureau of Prisons (BOP) can additionally shave off up to a year through its Residential Drug Abuse Program (RDAP). “To qualify, the prisoner must not have a disqualifying offense, such as terrorism or gun charge, and voluntarily provided information that they had a drug or alcohol problem prior to their arrest. This disclosure has to be done prior to sentencing during the pre-sentence interview and must be also documented in the Presentence Report, a detailed report used by the BOP to determine things like classification and programming for the prisoner,” Forbes noted.
Additionally, the federal First Step Act, which President Trump signed into law in 2018, enables Holmes to “earn up to 365 days off any imposed sentence by participating in prison programming such as a self-improvement classes, a job, or religious activities,” Forbes reported.
Given the opportunities to shave time off her sentence, Holmes may ultimately serve just 66 months of her original 135 month sentence in federal prison.
Elizabeth Holmes (above) taken backstage at TechCrunch Disrupt San Francisco 2014 when Holmes was at the height of her fame and popularity. At this point, Theranos’ Edison blood testing device had not yet been shown to be a fake. But evidence was mounting as clinical laboratory scientists and anatomic pathologists became aware of the technology’s shortcomings. (Photo copyright: Max Morse/Wikimedia Commons.)
Fall of a Silicon Valley Darling
Theranos boasted breakthrough technology and became an almost overnight sensation in Silicon Valley when it burst onto the scene in 2003. Holmes, a then 19-year-old Stanford University dropout, claimed Theranos would “revolutionize the world of blood testing by reducing sample sizes to a single pin prick,” Quartz reported.
The height of the company saw Theranos valued at $9 billion, which came crashing down when the Wall Street Journal reported in 2015 that questionable accuracy and procedures were being followed by the company, CNN reported.
“From the moment Holmes concluded her presentation and stepped off the podium on Monday afternoon, she, her company, and her comments became the number one subject discussed by attendees in the halls between sessions and in the AACC exhibit hall,” Michel wrote, adding, “The executive team and the investors at Theranos have burned through their credibility with the media, the medical laboratory profession, and the public. In the future, the company’s claims will only be accepted if presented with scientific data developed according to accepted standards and reviewed by credible third parties. Much of this data also needs to be published in peer-reviewed medical journals held in highest esteem.”
Ultimately, investors who had jumped in early with financial support for Theranos were defrauded of hundreds of millions of dollars and Holmes was sentenced to 11 years/three months behind bars.
“Theranos had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary technology, and with questionable accuracy. It also came to light that Theranos was relying on third-party manufactured devices from traditional blood testing companies rather than its own technology,” CNN added.
The company shut down in 2018.
And so, the Elizabeth Holmes saga continues with reductions in her prison sentence for “good behavior.” The irony will likely not be lost on the anatomic pathologists, clinical laboratory scientists, and lab managers who followed the federal trials.
