As reported by The New York Times on Thursday, the pilot program will hire private firms to deploy AI to make what are known as "prior authorization" decisions regarding whether Medicare should pay for certain procedures, including spinal surgeries and steroid injections. The program is set to run first in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington.

According to the paper, the program will rely on algorithms similar to those "used by insurers have been the subject of several high-profile lawsuits, which have asserted that the technology allowed the companies to swiftly deny large batches of claims and cut patients off from care in rehabilitation facilities."

The way the program is being structured will also give AI firms big incentives to maximize the denial of claims for Medicare recipients, as the Times reported that "Medicare plans to pay them a share of the savings generated from rejections."