MACPAC recommends greater transparency and human oversight for AI use in prior authorization

MACPAC Pushes for AI Oversight in Medicaid Prior Authorization

The Medicaid and CHIP Payment and Access Commission approved recommendations for Congress that would require human review of all automated denials and service reductions in prior authorization decisions.

MACPAC will include the recommendations in its June report to Congress. The commission wants the Centers for Medicare & Medicaid Services to clarify that automation tools cannot make final determinations on medical necessity alone-a qualified individual must review and authorize all adverse decisions.

What MACPAC is recommending

The commission called for three specific actions:

• CMS should clarify federal requirements that human experts, not automation, make final decisions on denials or service reductions
• CMS should amend fee-for-service regulations to establish similar requirements and issue guidance on managed care oversight
• States should require Medicaid health plans to disclose their use of automation, including how they test, evaluate, and oversee these systems

The recommendations address a growing concern: states and health plans increasingly use AI to screen prior authorization requests, but lack clear rules about when and how these tools can reject coverage.

Why this matters

Prior authorization-the process insurers use to approve treatments before patients receive them-affects millions of Medicaid and CHIP enrollees. When AI systems deny or reduce requests without human review, patients may lose access to necessary care.

MACPAC's push for transparency signals that federal regulators view current oversight as insufficient. The recommendations would require plans to document their AI use and allow states to enforce accountability.

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