And they say an overhaul — less than seven months before states must start enforcing the requirement — will be costly.

by the Centers for Medicare & Medicaid Services dictate many granular details about how the new work requirements will play out. They cover how states should check whether Medicaid enrollees are following the rules, and how people can claim an exemption so that their health benefits don’t hinge on work, community service, or going to school.

Next year, President Donald Trump’s One Big Beautiful Bill Act could require roughly across 42 states and the District of Columbia who receive Medicaid benefits to prove they’re working or participating in a similar activity to keep their health coverage — unless they qualify for an exemption.

Much of the verification will run through state computer systems that assess whether low-income people qualify for Medicaid and other safety net programs — technology often built and run by private companies under contracts routinely worth hundreds of millions of dollars. Many of those systems have a history of errors that can cut off benefits to eligible people.

For months, states have been communicating with federal regulators and rushing to build systems to comply with the looming mandates, said Kinda Serafi, a partner at the Manatt Health consulting and legal firm. The rules released this week represent a “significant policy pivot” from what states were expecting, Serafi said.

“The administration has actually taken what we know to be a tough situation and has just made it even worse,” Serafi said. States had already committed to paying contractors tens of millions to adjust their systems.

After Trump signed his signature tax-and-spending bill into law last July, one of the most significant remaining questions was how much discretion the federal government would give states to define exemptions for people too sick to work. The “medical frailty” exemption allows a person to claim they have a health condition that prevents them from working at least 80 hours a month, as the law requires.

To qualify, a person generally must fit into at least one of five categories: They must be blind or disabled; have a substance use disorder; have a disabling mental disorder; have a physical, intellectual, or developmental disability that significantly impairs their daily life; or have a serious medical condition. States are not allowed to add categories.

Under the new regulations, CMS said having a medical condition alone isn’t sufficient to exempt someone from the work requirements. States must assess “the severity of an individual’s condition” to determine whether they can stay on Medicaid without working — a standard that makes it more difficult for enrollees to meet the criteria.

CMS officials did not list specific conditions that qualify for exemptions, but the agency did say homelessness can’t be a reason to claim that exemption because it is not a medical condition.

To implement the law, states “will have to undo work that they did,” said , deputy director of Princeton University’s State Health and Value Strategies program, which works with state governments on various health coverage issues.

The Trump administration previously acknowledged that the work to upgrade state Medicaid eligibility systems to comply with the law is coming at a cost. In January, top CMS officials said government contractors, including Deloitte, Accenture, and Optum, and reduced rates through 2028 to help states adjust their systems.

The discounts “may be helpful” in some states, but they’re “not going to be helpful across the board” due to variations in state contracts, said , director of the State Health and Value Strategies program.

“Anytime you have to go back and say, ‘Oops, we need to reprogram this one thing,’ there’s a cost,” Howard said.

States were prepared to create lists of conditions and diseases to qualify people for work requirement exemptions, according to health care experts advising them. Mining data to verify someone’s illness was already a tall order for states because the computer systems that determine whether someone is eligible for Medicaid often do not communicate with the systems that track medical claims.

America’s health care payment systems rely on a set of standardized codes that correspond to specific diagnoses.

But there’s no “code that designates that someone is too sick to work — that’s a subjective assessment,” said Rachel Klein, deputy executive director of , a nonpartisan advocacy group for people with HIV. “This is a recipe for disaster.”

The new federal standards pose immediate issues for Nebraska, which launched its Medicaid work requirement on May 1, eight months before the federally mandated deadline. Nebraska handles decisions on medical frailty differently than the Trump administration does.

Nebraska officials had already released a nearly of medical conditions that qualify as exemptions, such as types of cancer, dementia, autism, epilepsy, HIV, and Parkinson’s disease. The state, which relies on government workers to check Medicaid eligibility, doesn’t require a person to prove how sick they are.

But under Trump’s rules, people will have to show their qualifying illness is impeding their ability to work.

Now, Nebraska is “going to have to go back and figure out how to assess whether all of these people are too sick to meet the requirement,” Klein said.

Medicaid enrollees are slated to start losing coverage this summer under Nebraska’s early rollout.

Sarah Maresh, a program director with , an advocacy organization for people with low incomes, said the state should refrain from terminating people’s coverage until next year because of the changes it will need to make. State residents are already confused and scared, she said, and the new rule “makes matters much worse.”

In response to several questions, Jeff Powell, a spokesperson for Nebraska’s Department of Health and Human Services, said the state is reviewing the new federal regulation to determine potential impacts.

The new federal standards will limit people’s ability to attest that they are medically frail starting in 2028 and will require documentation as proof, another change states weren’t expecting, Meuse said. had planned to allow applicants and enrollees to declare conditions themselves to get exemptions, according to KFF.

Striking the right balance of flexibility was an important part of deliberations when crafting these rules, CMS Administrator Mehmet Oz said on a June 1 call with reporters. “The mantra we kept coming back to was that we’re forgiving, but we’re not foolish,” he said.

Trump officials wrote in the regulation that Medicaid work requirements have “the potential to empower Medicaid beneficiaries” by allowing them to “escape isolation and dependency, build confidence, achieve self-sufficiency and prosperity, and improve health.”

Stephanie Burdick, a leader of the Protect Medicaid Utah coalition, disputed the premise.

“If they want to improve work opportunities or connection and decrease isolation and loneliness, they would be starting job programs and volunteer service programs,” Burdick said. “They wouldn’t just be forcing more administrative burden onto people and then saying that it’s good for them.”

An estimated will become uninsured by 2034 due to Medicaid work requirements, according to the nonpartisan Congressional Budget Office.

But with the new regulations, Howard said, there’s a risk of “that number being even higher.”

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In the days that followed, the nurse failed a drug test and was fired, the order states. The nurse later admitted that for months he had pilfered and abused fentanyl left over after surgeries, sometimes daily, according to the order.

Under most circumstances, this would be a routine case of what is known as “drug diversion,” the unlawful taking of controlled substances from healthcare facilities — believed to be so widespread that it occurs at just about every U.S. hospital.

But the Erlanger case stands out because a high-tech watchdog was supposed to be on guard.

The hospital uses the newest line of defense against drug diversion: Sentri7, powered by artificial intelligence and designed to detect missing drugs faster than any human can. But for months at Erlanger, Sentri7 failed to raise alarms, overlooking missing drugs and other “inconsistencies” that “should have been flagged,” the nursing board’s order states.

The Erlanger case, which has not been previously reported, offers a rare glimpse at an apparent failure of AI drug diversion software used in hundreds of U.S. hospitals with little transparency or oversight. Healthcare facilities are not required to disclose their implementation of this kind of software or report malfunctions to anyone, so there is no full account of how widely these programs are used or how often they fail.

Erlanger Baroness, also referred to as Erlanger Medical Center, declined to comment on its use of Sentri7 or on the diverted drugs. André Rebelo, a spokesperson for the health division at Wolters Kluwer, the Dutch technology company behind Sentri7, declined to answer questions about what happened at Erlanger but said the company remained “confident in our software.”

Little Transparency

David Rastall, a Johns Hopkins Medicine neurologist and AI researcher, said that because AI technology is heavily proprietary and hospital officials often don’t understand how it works, this lack of transparency allows for errors to be buried rather than fixed. That means errors could be repeated at other hospitals, he said.

“The ideal for patients, caregivers, and hospital systems would be,” Rastall said, “when an AI is found to be making some type of error, that becomes very transparent and public.”

The Drug Enforcement Administration mandates that hospitals confidentially report lost or stolen drugs. Hospitals can also report stolen drugs to state health agencies, which license medical professionals and investigate wrongdoing.

But these reports are not required to include details about any AI software involved, according to interviews with three drug diversion prevention experts. In interviews, all said they had never seen an AI failure publicly documented like the apparent one at Erlanger.

“I’ve never myself seen these technologies be called out in that specific way,” Jacob Smith, a pharmacist in charge of drug security at Johns Hopkins Medicine, said of the apparent Sentri7 failure. “It doesn’t make sense to me how you could miss it.”

Smith and other experts said the Erlanger case also raises questions because the theft of leftover drugs is one of the most well-known methods of diversion. And fentanyl, a painkiller that can be 50 times as strong as heroin, is one of the most common targets.

Terri Vidals, the founder of , questioned whether the Erlanger case was the result of user error instead of malfunction.

“This is the most basics of basics for this software,” Vidals said. “I find it interesting that they’re saying it wasn’t flagged by the software. I think there’s maybe more to that story.”

The apparent Sentri7 failure at Erlanger was revealed by the Tennessee Department of Health in a routine release of in December. Among those records was the Board of Nursing order, which summarizes a state investigation into nurse anesthetist John Stevenson, who settled the case against him by signing the document in November.

Stevenson declined to comment through his attorney. He has not been charged with any crime related to the Erlanger case. The nursing board put his license on probation while he went to drug counseling.

Bill Christian, a spokesperson for the Department of Health and Board of Nursing, declined to comment on the Erlanger case or Sentri7. In response to public records requests, the Department of Health and the Tennessee Health Facilities Commission each said it possessed no other documents about the apparent Sentri7 failure at Erlanger.

Erlanger spokesperson Charlie Milburn said earlier this year that the hospital had prepared a written statement about its use of Sentri7 in response to questions from ºÚÁϳԹÏÍø News.

That statement was never released.

“Our legal team is debating whether this is something we want to talk about at all,” Milburn said in a March email, before later declining to answer any questions.

Kristy Drollinger, a Wolters Kluwer executive who spoke generally about Sentri7 to ºÚÁϳԹÏÍø News in March, said the software is in high demand because so many hospitals have struggled to secure their drugs.

Sentri7 monitors about 60 “attributions of risk” that identify red flags for further investigation by hospital employees, Drollinger said.

“It’s pretty scary,” Drollinger said of widespread drug theft. “Every health system, every health facility, has had diversion at some point — and probably has it now.”

‘The Way of the Future’

Drug diversion is a widespread challenge in U.S. medical facilities. It can lead to patients not receiving medication or getting drugs that are contaminated with blood-borne diseases. It’s estimated as many as 15% of all healthcare workers divert drugs at least once, according to the nonprofit .

Diversion has been linked to at least — causing more than 200 infections, mostly of hepatitis C — since 1985, according to the Centers for Disease Control and Prevention.

To prevent this, hospitals attempt to track each pill or vial from the moment it is dispensed to the moment it is given to a patient, by comparing data from electronic medication cabinets and patients’ health records.

Hospital staff once performed this painstaking process manually, but in the past decade the task has become largely automated by anti-diversion software. After years of mergers and buyouts, two programs now dominate the industry: Wolters Kluwer’s Sentri7 and Bluesight’s ControlCheck. Both incorporate AI.

“It’s definitely the way of the future,” said Luke Overmire, owner of .

More than 1,500 hospitals use ControlCheck, according to Bluesight. An additional 700 use Sentri7 Clinical Surveillance programs, which can include its drug diversion software, according to Wolters Kluwer.

Neither company publishes the price of its software. Smith, the drug safety official from Johns Hopkins, said hospitals purchase these “expensive technologies” because a disastrous diversion case could result in a multimillion-dollar fine from the DEA.

“They don’t promise a return on investment,” Smith said. “They promise cost avoidance.”

In 2022, a funded by the National Institutes of Health found that Sentri7, then known as Flowlytics, could uncover drug diversion faster than existing methods. The study’s primary author worked for Invistics, the company that previously owned Sentri7.

According to that study, researchers tested the software by having it comb through medication data spanning two years and 10 hospitals in search of 22 nurses who were already known to have diverted drugs.

The program not only found them all, the study states, but found them faster than humans by as little as a week and as much as a year and a half.

At Erlanger, the humans spotted the signs of trouble first.

According to the Board of Nursing order, co-workers reported that Stevenson appeared impaired “while on duty in the surgery center” on or around June 30, 2025.

Stevenson “had slurred speech, appeared extremely tired, was seen standing with his eyes closed and swaying, exhibited head nodding while standing upright and appeared to have difficulty keeping his eyes open,” according to the order.

When questioned by state investigators, Stevenson admitted that he began diverting “unused fentanyl that would otherwise have been wasted after surgical procedures” in March 2025, according to the order. Stevenson said he used the fentanyl waste once or twice a week at first, then “increasing to daily use” by June of that year, the order states.

Erlanger audited Stevenson’s dispensing record over those four months. It found approximately five instances when Sentri7 didn’t flag missing drugs, according to the order.

It adds that the hospital found “additional inconsistencies between drug dispensing and waste documentation that should have been flagged by the automated monitoring system.”

One possible explanation is provided by the Board of Nursing, which said in the order that Sentri7 was in its “initial learning phase” at Erlanger, though the board provided no details.

In an interview, without discussing Erlanger specifically, Drollinger said Sentri7 has no “learning phase,” because it is trained on nine to 12 months of historical data when implemented at a new hospital.

Smith, of Johns Hopkins, had another theory.

In an interview, Smith said his experience with AI drug diversion software had led him to believe that it is effective at monitoring emergency rooms and intensive care units but less so in operating rooms, where drugs are dispensed and charted differently.

These areas can be harder for AI to track, Smith said, and therefore require humans to keep a closer watch.

“We’ve got people whose entire job is to work with this software,” Smith said. “The software is a piece of it, but if you rely on the software to give you all your signals, you’ll miss stuff. It’s just not 100%.”

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The health giant has rolled out a new suite of note-taking software, made by healthcare AI pioneer Abridge, intended to summarize a patient’s visit at supersonic speed. For many clinicians, the technology soothes one of the persistent headaches of their lives — administration and paperwork.

But the AI scribe caused another headache for Boyer and his colleagues: It is “not super useful.” They end up correcting the computer-written notes.

Abridge is “not good at picking up on clinical nuance, at picking up on the emotional tone” that can be critical in the mental health field, Boyer said. For example, for manic patients, what’s said is less important than how it’s said, Boyer said, and the software struggles with picking up on those cues.

Note-taking software isn’t the wave of the future; it’s the wave of the present. Hospitals nationwide are implementing it. And researchers are finding some benefits. A year after installation, doctors who used these products the most saved more than half an hour of work daily, according to published in April in the Journal of the American Medical Association.

Many doctors love the products where they’re deployed — several to the scribes.

Nevertheless, as Boyer’s example shows, there are persistent questions about the systems’ quality. While Boyer and his colleagues spend time correcting notes, safety researchers worry clinicians might not be diligent about catching errors. That might mean future doctors rely on bad information.

Abridge says it evaluates its scribes at every stage of deployment, including with head-to-head tests against previous versions of the software.

“Following deployment of a model, we monitor clinician edits, star ratings, and free-text feedback from clinician users about note quality,” the company’s director of applied science, Davis Liang, told ºÚÁϳԹÏÍø News in a statement.

Artificially intelligent scribe software is part of a swarm of AI-powered tools coming to healthcare. Clinicians and patient-safety advocates say government regulations are not well constructed to guard against the threat that the new technology will miss or obscure important details of patients’ conditions, potentially harming them.

“There is currently no safeguard in place” to vet scribe software at the federal level, said Raj Ratwani, a researcher specializing in human factors — that is, how people interact with technology — at MedStar Health, a large hospital system based in Columbia, Maryland.

Ratwani worries that safeguards on health software will relax even further. from the Office of the National Coordinator for Health IT — the body that regulates electronic health records, the central chronicle of care for patients — could weaken requirements to make medical records understandable, easy to use, and transparent about the use of AI, Ratwani said. And an incomprehensible record could confuse clinicians and lead to errors.

Beginning in the Obama administration, the Health and Human Services Department’s IT office , in which developers try their products on doctors and nurses. Regulators also sought to require more transparency from companies in the surging market in AI tools.

Both of those requirements are axed in the proposed rules from HHS Secretary Robert F. Kennedy Jr.’s health IT office.

Doctors and other health practitioners consult records for clinical information, such as scribe notes summarizing the history of patient care and lists of drugs and therapies their patients have used. Doctors also input orders for care.

Poor or cluttered design of a records system “might make the list of medications so complicated and confusing that the ordering provider selects the wrong medication,” Ratwani said.

Abridge’s general counsel, Tim Hwang, said the company “broadly supports” the government’s rules as a “necessary modernization” that “accommodates the speed at which AI is evolving.”

The old rules “put way too much burden” on electronic health record systems, said Ryan Howells, a principal at Leavitt Partners, which consults for digital health companies. Leavitt supports the proposals.

Dropping requirements, the administration argues, will result in more innovation and competition. The electronic health record market has steadily consolidated, with hospitals and other clinicians choosing from fewer vendors.

A 2022 study found the top two vendors, Epic and Oracle Health, of the hospital market. And Howells argued too many rules burdened providers looking for good record systems. Federal regulations, Howells said, are “the single biggest inhibitor to true clinical innovation.”

The Trump administration proposal to remove requirements governing records is overbroad, some critics say. It removes regulations intended to keep records secure. It also eliminates privacy protections for sensitive medical data they safeguard, overhauls standards governing the formats data is sent in, and more. The rule may give clinicians “more health IT choices to meet their needs through increased competition,” the government wrote in its proposal.

HHS’ health IT office declined comment, noting the proposal is still winding through the regulatory process. Public comment closed in February.

But most concerning to some — even in the hospital and developer sectors — are proposals to scotch prerequisites to ensure new products are tested on actual users, and to ensure AI tech’s decisions are transparent to doctors and nurses.

“Historically, hospitals and health systems have been challenged by the black box nature of certain AI tools and how the algorithms are developed,” the American Hospital Association’s Jennifer Holloman said. And with more AI tools flooding the market, the association , transparency is even more critical.

Complaints about the safety of electronic health records are long-standing, even for seemingly straightforward tasks. Ratwani likes the example of ordering medication for a given condition.

“The physician is trying to order Tylenol, and the medication list can be so confusing that there’s 30 different versions of Tylenol all at a different dose and for different purposes, when in reality that could be designed much more simply and make it easier for the physician to actually pick the right type of Tylenol that they’re ordering,” he said.

Real-world user testing was intended to simplify record design for doctors. But the administration is ending that requirement in a confusing way, said Leigh Burchell, vice president for policy and public affairs at Altera Digital Health, an EHR developer.

In Burchell’s interpretation of the rules, which refer to “enforcement discretion,” a principle in which the government can opt not to enforce certain rules, companies are still required to do the testing — the part that takes work — but are not mandated to report their results to the feds.

The administration is also ending a Biden-era idea to create AI transparency “model cards.” The concept was that clinicians could explore the data used to train AI tools that advise clinicians with a simple mouse click. But few took advantage of the year-old tool, Trump’s regulators say.

Still, hospitals and doctors are wary of removing it. The tool “provides information on how a predictive or generative AI application was designed, developed, tested, evaluated and should be used. These data are critical to foster trust in AI tools and ensure patient safety,” the AHA wrote in a comment letter to the HHS IT office. The American College of Physicians , saying a “lack of clarity could undermine clinician trust, increase liability expense, and erode the patient-physician relationship.”

Even developers aren’t totally sure about the idea. Burchell said the electronic health records trade group she’s part of had “a lot of different perspectives” on the issue. “Normally, we tend to be a bit more aligned on our responses.”

Still, Burchell’s group thought companies should be transparent about the data AI relies on to make decisions and how it comes up with recommendations.

Evidence for AI tools’ effectiveness or contradictory.

A comparing 11 AI scribes for potential use as a pilot in the Veterans Health Administration found the software performed worse than humans across five simulated scenarios. “Although ambient AI scribes can generate complete notes, the overall quality remains broadly below that of human-authored documentation,” the authors noted, with the omission of information being particularly concerning, given the potential to affect follow-up care.

The vendors in the VA study weren’t identified, for what the authors called “contractual reasons.”

And that’s just one type of AI tool. A wave of them is coming, each needing its own evaluation, to say nothing of tools that have already been installed.

Boyer said he can mostly ignore his AI scribe, for the moment. But he worries that management will design his job around the expected time savings and schedule more patients — meaning he’d need to spend more time both with patients and correcting the software’s errors.

A KP spokesperson, Vincent Staupe, said the company does not require its clinicians to use AI.

“When I am correcting that note, I feel like this is too much work,” Boyer said. “This is definitely making this worse, and this is taking up time that I need to not be spending on correcting an AI tool.”

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Privacy between doctors and patients is . But the Trump administration is, in effect, trying to peek into the exam room. The Office of Personnel Management is seeking unredacted federal worker health data from insurers. The unusual request, which would give the government detailed personal and health information, alarmed health policy and legal experts, lawmakers, and insurance executives.

ºÚÁϳԹÏÍø News Washington health policy reporter Amanda Seitz appeared on WAMU’s Health Hub on April 29 to discuss why the government’s request has many worried about how this personal information would be handled.

Maia Rosenfeld contributed to this report.

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“They’re the folks that work at restaurants. They’re the teacher’s aides,” said Starr, a registered nurse who became Open Door’s chief executive more than six years ago. Those patients, he said, are “really the heart and soul of rural America.”

He said if his remote health centers don’t get a share of the billions of dollars Congress earmarked to transform health care in rural America, patients may soon lose services. About 50% of Open Door’s 60,000 patients are on Medicaid, the joint state and federal insurance program that, together with the related Children’s Health Insurance Program, covers with low incomes or disabilities.

When Congress approved the One Big Beautiful Bill Act last summer, it cut nearly $1 trillion from Medicaid over the next decade. Now, Starr hopes the $50 billion Rural Health Transformation Program, which was part of the same bill, will help keep his patients covered.

Yet, small community health care providers, such as Open Door, may find they are sharing the billions with an army of corporate giants before it reaches their patients.

Months after federal leaders announced that all 50 states won first-year awards, ranging from $147 million for New Jersey to $281 million for Texas, state plans reveal that a heavy dose of prescribed spending will go to companies that can increase the use of electronic health records, strengthen cybersecurity, and improve state and health system technology platforms.

And at least four large-scale coalitions of companies are now pitching multipronged services to the states. Many of the companies already work with regional health systems and states through Medicaid contracting or mobile and telehealth operations.

How those services will help improve the health care of rural Americans at places such as Open Door remains an open question.

States Stare Down Reporting Deadlines

Federal regulators were “really interested in seeing digital health investments” when they crafted the five-year rural health program rules last year, said Maya Sandalow, an associate director at the Bipartisan Policy Center, a think tank based in Washington, D.C. She co-authored a recent report on how the 50 states plan to invest in technology, including modernizing health care infrastructure and expanding virtual care options such as telehealth and remote patient monitoring.

“The rural health fund isn’t really designed to directly replace or offset the lost Medicaid funding,” Sandalow said, noting that the federal staffers in charge of the program — money that could help rural hospitals and clinics pay for patient care — at 15% of the total funding awarded to a state.

Federal regulators also established tight reporting deadlines, forcing states to move quickly.

States must file progress reports and obligate all first-year funding , according to the Centers for Medicare & Medicaid Services, the federal agency overseeing the program. States could see their awards decreased or terminated at any time if they fail to follow federal requirements, according to the .

As of early April, CMS had not approved or had only partially approved some state budgets, including those of Wyoming, Colorado, and Vermont, according to state officials. CMS spokesperson Catherine Howden, who declined to say which states still needed revised budgets approved, said the agency does not provide “state-by-state updates.”

In Alaska, the budget is approved but the state has not announced when it will release full grant proposals and awards, said Tricia Franklin, program coordinator for Alaska’s rural health transformation.

“Early summer was the target,” Franklin said. But the response from vendors and applicants has been “much greater than expected, so it may take us a little longer.”

Working with consulting companies is an established way for states to “quickly and effectively” meet federal deadlines and roll out grant money, said , national director for population health at the Milbank Memorial Fund, a nonprofit focused on state health policy work.

Upgrading Technology, Modernizing Rural Health

Science Applications International Corp., a Fortune 500 government contractor, pulled together the . SAIC does a variety of technology work such as cybersecurity and engineering support. The alliance also includes Walgreens and Mission Mobile Medical, which turns RVs into primary care clinics. A data analytics company, a telemedicine and software company, and a company that helps place medical graduates in health systems are also part of the coalition.

The SAIC alliance offers “an ecosystem” of companies that can coordinate the work states have promised, said , SAIC’s Rural Health Transformation Program lead and a former chief information officer for the Virginia Department of Health. Each of the companies has representatives focused on the rural program, he said.

A lack of digital infrastructure — such as electronic health records at different clinics and hospitals that can talk to one another — has been a consistent barrier for rural medical care teams, said the Bipartisan Policy Center’s Sandalow.

“The funding hasn’t always been there in order for rural areas to create the infrastructure that’s needed to fully adopt remote patient monitoring, telehealth, artificial intelligence in ways that will really be supportive,” Sandalow said. “It takes things like updating infrastructure, changing workflows.”

Sandalow’s found that Maine and Utah are investing in cybersecurity; Indiana, Missouri, and New Mexico plan to modernize their electronic health records; Oklahoma plans to buy hardware and software, subsidize subscriptions, and give technical support to rural providers; and states such as Arizona and South Carolina will use funds to create telehealth hubs or buy remote patient monitoring equipment.

Federal regulators, when creating the rural program’s spending rules, also said no more than 5% of a state’s total funding awarded could be used to replace electronic medical records systems that already meet federal standards. Sandalow said that means states will focus on enhancements and upgrades to their current systems.

Gainwell Technologies, which operates the systems for dozens of state Medicaid programs, is spearheading . Rushil Desai, a Gainwell senior vice president, said states’ detailed spending plans are “changing in real time.”

Maine’s Medicaid plan contracts with Gainwell, and the state’s initial application listed four contracts worth more than $16 million over five years for the company. The state confirmed it has received federal approval for only its first year of spending, which includes a to implement changes to the state’s Medicaid claims system.

James Lomastro, a senior-care advocate in rural Massachusetts with the nonprofit , said he worries that large vendors and health systems will get the state’s transformation dollars.

Clinics, home care agencies, and nursing homes that “actually provide day-to-day support in the community are mostly on the margins” of state discussions about how to spend the money, he said. A spokesperson for Massachusetts’ Executive Office of Health and Human Services, Olivia James, said state officials would “ensure that everyone has a seat at the table” with training, financial incentives, and direct investments.

Arizona’s rural fund budget, which is $167 million for the first year, allocates for medical diagnostic equipment and technology upgrades, including to electronic health records, specifically for rural health care facilities.

But it also for county public health departments, said Pima County Public Health Director Theresa Cullen. The approved budget includes up to $4 million for grants to support community health workers.

“In these rural communities, you need to be present,” Cullen said.

Alina Czekai, director of the CMS rural health transformation office, said her team plans to visit all 50 states. She spoke at the National Rural Health Association’s policy conference in Washington, D.C., in February and told the audience that her team wants “the money to go to rural communities, rural providers, rural patients.” The association’s members include rural hospitals and clinics, which are expected to suffer big losses under the Medicaid cuts.

In California, Open Door’s Starr said he provided input on his state’s initial application, which won $234 million in first-year funding, but he is not clear on what the next steps will be for getting money from the program.

For his patients, Starr said, money is needed for technology upgrades. After all, he said, updated electronic health systems could operate seamlessly and store the documentation needed to keep a patient enrolled in Medicaid.

Updated technology could be exactly what Open Door and other area clinics need to “help keep people covered,” Starr said.

ºÚÁϳԹÏÍø News senior correspondent Phil Galewitz and rural health care correspondent Arielle Zionts contributed to this report.

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Céline Gounder, ºÚÁϳԹÏÍø News’ editor-at-large for public health, discussed the increase in hospital visits during tick season on CBS’ CBS Mornings on April 20. On April 18, for CBS News’ The Daily Report, Gounder discussed how some health podcasts generated by artificial intelligence are spreading misinformation. She also spoke with Scripps News about President Donald Trump’s nominee to lead the Centers for Disease Control and Prevention, Erica Schwartz.

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The Office of Personnel Management 65 insurance companies to provide monthly reports with detailed medical and pharmaceutical claims data of more than 8 million people enrolled in federal health plans, ºÚÁϳԹÏÍø News reported earlier this month. The request, which could dramatically expand the personally identifiable medical information OPM can access, alarmed health ethicists, insurance company executives, and privacy advocates.

Now, OPM Director Scott Kupor has two letters on his desk — one from 16 U.S. senators and another led by Rep. Robert Garcia, the top Democrat on the House Oversight Committee — asking him to drop the agency’s proposal.

“The collection of broad, personally identifiable data regarding medical care and treatment raises concerns that OPM could target certain federal employees seeking vital health care services that the Administration disagrees with on political grounds,” the Democratic House members , citing ºÚÁϳԹÏÍø News.

The letters from congressional Democrats alone are unlikely to reverse OPM’s plans. Republicans — who control Congress and, ultimately, any oversight activities — have not weighed in on OPM’s notice.

OPM did not immediately respond to a request for comment on the letters. The agency, which said in its notice that it will use the data for oversight and to manage the federal health plans, has not publicly addressed written concerns about its proposal.

The notice, posted and sent to insurers in December, states that insurers are legally permitted to disclose “protected health information” to OPM and does not provide instructions to redact identifying information, such as names or diagnoses, from the claims.

That data could be used to implement cost-saving measures, health policy experts told ºÚÁϳԹÏÍø News earlier this month. But it would also give the Trump administration — which has laid off or fired tens of thousands of federal workers — access to a vast trove of personal information.

In the letters, Democratic lawmakers lay out a number of concerns about potential consequences of OPM’s obtaining detailed medical claims for millions of federal workers.

The — led by Adam Schiff of California and Mark Warner of Virginia — argues that OPM is not equipped to safeguard such sensitive data and that the administration could share the records across government agencies, as it has done with personal information on millions of Medicaid enrollees.

They also assert that the agency does not have a legal right to the data and that insurers’ sharing the information with OPM would “violate the core principles of the Health Insurance Portability and Accountability Act.” HIPAA requires certain organizations that maintain identifiable health information — such as hospitals and insurers — to protect it from being disclosed without patient consent. The proposal, the senators warn, threatens patients’ relationships with their clinicians, especially “sensitive disclosures regarding mental health, chronic illness, or other deeply personal conditions.”

“For these reasons, we strongly urge you to cease any further consideration of this proposal,” states the letter, which was sent to Kupor on April 19.

The American Federation of Government Employees, the largest union for federal employees, to ºÚÁϳԹÏÍø News’ reporting. The union noted in a statement from its national president, Everett Kelley, that OPM’s proposal “comes in the context of coordinated attacks on federal employees and repeated stretching of the legal boundaries for sharing sensitive personal data across government agencies.

“The question of what this administration intends to do with eight million Americans’ most private health information is not academic,” the AFGE statement read. “It is urgent.”

In an emailed statement, Kelley applauded the congressional letters.

“We are pleased that Democratic lawmakers on the Hill are just as outraged as we are over this administration’s blatant attempt to breach the privacy of millions of Americans across the country,” Kelley wrote. “We share their concerns regarding potential misuse of the information to continue illegally targeting workers and their demand for OPM to withdraw this proposal.”

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LISTEN: Quashing innovation or risking a patient’s health? Lauren Sausser told WAMU’s Health Hub on April 15 why the White House and some states are at odds over how to regulate AI in health care.

Speed, efficiency, and lower costs. Those are the traits artificial intelligence supporters celebrate. But the same qualities worry physicians who fear the technology could lead to insurance denials with humans left out of the loop.

With scant federal regulation, states are left to shape the rules on AI in health care. For residents in the Washington, D.C., metropolitan area, a divide is playing out on opposite sides of the Potomac River. Maryland and Virginia have taken very different approaches to regulating AI in health insurance.

ºÚÁϳԹÏÍø News correspondent Lauren Sausser joined WAMU’s Health Hub on April 15 to explain why where you live may determine how much of a role AI plays in your coverage.

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If you or someone you know may be experiencing a mental health crisis, contact the 988 Suicide & Crisis Lifeline by dialing or texting “988.”

Vince Lahey of Carefree, Arizona, embraces chatbots. From Big Tech products to “shady” ones, they offer “someone that I could share more secrets with than my therapist.”

He especially likes the apps for feedback and support, even though sometimes they berate him or lead him to fight with his ex-wife. “I feel more inclined to share more,” Lahey said. “I don’t care about their perception of me.”

There are a lot of people like Lahey.

Demand for mental health care has grown. Self-reported poor mental health days rose by 25% since the 1990s, analyzing survey data. According to the Centers for Disease Control and Prevention, suicide rates in 2022 that hadn’t been seen in nearly 80 years.

There are many patients who find a nonhuman therapist, powered by artificial intelligence, highly appealing — more appealing than a human with a reclining couch and stern manner. with begging for a therapist who’s “not on the clock,” who’s less judgmental, or who’s just less expensive.

Most people who need care don’t get it, said Tom Insel, former head of the National Institute of Mental Health, citing his former agency’s research. Of those who do, 40% receive “minimally acceptable care.”

“There’s a massive need for high-quality therapy,” he said. “We’re in a world in which the status quo is really crappy, to use a scientific term.”

Insel said engineers from OpenAI told him last fall that about 5% to 10% of the company’s then-roughly 800 million-strong user base rely on ChatGPT for mental health support.

Polling suggests these AI chatbots may be even more popular among young adults. A KFF poll found about 3 in 10 respondents ages 18 to 29 for mental or emotional health advice in the past year. Uninsured adults were about twice as likely as insured adults to report using AI tools. And nearly 60% of adult respondents who used a chatbot for mental health didn’t follow up with a flesh-and-blood professional.

The App Will Put You on the Couch

A burgeoning industry of apps offers AI therapists with human-like, often unrealistically attractive avatars serving as a sounding board for those experiencing anxiety, depression, and other conditions.

ºÚÁϳԹÏÍø News identified some 45 AI therapy apps in Apple’s App Store in March. While many charge steep prices for their services — one listed an annual plan for $690 — they’re still generally cheaper than talk therapy, which can cost hundreds of dollars an hour without insurance coverage.

On the App Store, “therapy” is often used as a marketing term, with small print noting the apps cannot diagnose or treat disease. One app, branded as OhSofia! AI Therapy Chat, had downloads in the six figures, said OhSofia! founder Anton Ilin in December.

“People are looking for therapy,” Ilin said. On one hand, the product’s name ; on the other, it warns in that it “does not provide medical advice, diagnosis, treatment, or crisis intervention and is not a substitute for professional healthcare services.” Executives don’t think that’s confusing, since there are disclaimers in the app.

The apps promise big results without backup. its users “immediate help during panic attacks.” it was “proven effective by researchers” and that it offers 2.3 times faster relief for anxiety and stress. (It doesn’t say what it’s faster than.)

There are few legislative or regulatory guardrails around how developers refer to their products — or even whether the products are safe or effective, said Vaile Wright, senior director of the office of health care innovation at the American Psychological Association. Even federal patient privacy protections don’t apply, she said.

“Therapy is not a legally protected term,” Wright said. “So, basically, anybody can say that they give therapy.”

Many of the apps “overrepresent themselves,” said John Torous, a psychiatrist and clinical informaticist at Beth Israel Deaconess Medical Center. “Deceiving people that they have received treatment when they really have not has many negative consequences,” including delaying actual care, he said.

States such as Nevada, Illinois, and California are trying to sort out the regulatory disarray, enacting laws forbidding apps from describing their chatbots as AI therapists.

“It’s a profession. People go to school. They get licensed to do it,” said Jovan Jackson, a Nevada legislator, who co-authored an enacted bill banning apps from referring to themselves as mental health professionals.

Underlying the hype, outside researchers and company representatives themselves have told the FDA and Congress that there’s little evidence supporting the efficacy of these products. What studies there are — and some companion-focused chatbots are “consistently poor” at managing crises.

“When it comes to chatbots, we don’t have any good evidence it works,” said Charlotte Blease, a professor at Sweden’s Uppsala University who specializes in trial design for digital health products.

The lack of “good quality” clinical trials stems from the FDA’s failure to provide recommendations about how to test the products, she said. “FDA is offering no rigorous advice on what the standards should be.”

Department of Health and Human Services spokesperson Emily Hilliard said, in response, that “patient safety is the FDA’s highest priority” and that AI-based products are subject to agency regulations requiring the demonstration of “reasonable assurance of safety and effectiveness before they can be marketed in the U.S.”

The Silver-Tongued Apps

Preston Roche, a psychiatry resident who’s , gets lots of questions about whether AI is a good therapist. After trying ChatGPT himself, he said he was “impressed” initially that it was able to use techniques to help him put negative thoughts “on trial.”

But Roche said after seeing posts on social media discussing people developing psychosis or being encouraged to make harmful decisions, he became disillusioned. The bots, he concluded, are sycophantic.

“When I look globally at the responsibilities of a therapist, it just completely fell on its face,” he said.

This sycophancy — the tendency of apps based on large language models to empathize, flatter, or delude their human conversation partner — is inherent to the app design, experts in digital health say.

“The models were developed to answer a question or prompt that you ask and to give you what you’re looking for,” said Insel, the former NIMH director, “and they’re really good at basically affirming what you feel and providing psychological support, like a good friend.”

That’s not what a good therapist does, though. “The point of psychotherapy is mostly to make you address the things that you have been avoiding,” he said.

While polling suggests many users are satisfied with what they’re getting out of ChatGPT and other apps, there have been about the service or encouragement to self-harm.

And or have been filed against OpenAI after ChatGPT users died by suicide or became hospitalized. In most of those cases, the plaintiffs allege they began using the apps for one purpose — like schoolwork — before confiding in them. These cases are being .

Google and the startup Character.ai — which has been funded by Google and has created “avatars” that adopt specific personas, like athletes, celebrities, study buddies, or therapists — are settling other wrongful-death lawsuits, .

OpenAI’s CEO, Sam Altman, has said up to may talk about suicide on ChatGPT.

“We have seen a problem where people that are in fragile psychiatric situations using a model like 4o can get into a worse one,” Altman said in a public question-and-answer session reported by , referring to a particular model of ChatGPT introduced in 2024. “I don’t think this is the last time we’ll face challenges like this with a model.”

An OpenAI spokesperson did not respond to requests for comment.

The company has said it on safeguards, such as referring users to 988, the national suicide hotline. However, the lawsuits against OpenAI argue existing safeguards aren’t good enough, and some research shows the problems are . OpenAI its own data suggesting the opposite.

OpenAI is , offering, early in one case, a variety of defenses ranging from denying that its product caused self-harm to alleging that the defendant misused the product by inducing it to discuss suicide. It has also said it’s working to .

Smaller apps also rely on OpenAI or other AI models to power their products, executives told ºÚÁϳԹÏÍø News. In interviews, startup founders and other experts said they worry that if a company simply imports those models into its own service, it might duplicate whatever safety flaws exist in the original product.

Data Risks

ºÚÁϳԹÏÍø News’ review of the App Store found listed age protections are minimal: Fifteen of the nearly four dozen apps say they could be downloaded by 4-year-old users; an additional 11 say they could be downloaded by those 12 and up.

Privacy standards are opaque. On the App Store, several apps are described as neither tracking personally identifiable data nor sharing it with advertisers — but on their company websites, privacy policies contained contrary descriptions, discussing the use of such data and their disclosure of information to advertisers, like AdMob.

In response to a request for comment, Apple spokesperson Adam Dema to the company’s App Store policies, which bar apps from using health data for advertising and require them to display information about how they use data in general. Dema did not respond to a request for further comment about how Apple enforces these policies.

Researchers and policy advocates said that sharing psychiatric data with social media firms means patients could be profiled. They could be targeted by dodgy treatment firms or charged different prices for goods based on their health.

ºÚÁϳԹÏÍø News contacted several app makers about these discrepancies; two that responded said their privacy policies had been put together in error and pledged to change them to reflect their stances against advertising. (A third, the team at OhSofia!, said simply that they don’t do advertising, though their app’s notes users “may opt out of marketing communications.”)

One executive told ºÚÁϳԹÏÍø News there’s business pressure to maintain access to the data.

“My general feeling is a subscription model is much, much better than any sort of advertising,” said Tim Rubin, the founder of Wellness AI, adding that he’d change the description in his app’s privacy policy.

One investor advised him not to swear off advertising, he said. “They’re like, essentially, that’s the most valuable thing about having an app like this, that data.”

“I think we’re still at the beginning of what’s going to be a revolution in how people seek psychological support and, even in some cases, therapy,” Insel said. “And my concern is that there’s just no framework for any of this.”

This <a target="_blank" href="/mental-health/ai-chatbots-therapy-big-risks-few-regulations/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

This year, executives from nearly every major health insurance company made the same declaration in calls with Wall Street analysts: Using artificial intelligence to make coverage decisions would help save them money.

Even the Trump administration is testing AI’s usefulness in managing the prior authorization process for the Medicare program, as well as seeking to override AI regulation by states.

But class action lawsuits have accused insurers of using AI to wrongfully withhold treatment. And outlines the risks of training AI on a current system rife with wrongful denials.

“There is a world in which using AI could make that worse, or at least replicate a bad human system, because the data that it would be training on is from that bad human system,” said Michelle Mello, a co-author of the study.

Although, Mello said, the research team found “real positives alongside the risks.”

In this video produced by ºÚÁϳԹÏÍø News’ Hannah Norman, Darius Tahir, a correspondent covering health technology, explains.

You can read Tahir’s recent coverage of AI’s use by health insurers below:

• “Red and Blue States Alike Want To Limit AI in Insurance. Trump Wants To Limit the States,” by Darius Tahir and Lauren Sausser.
• “AI Will Soon Have a Say in Approving or Denying Medicare Treatments,” by Lauren Sausser and Darius Tahir.

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