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Klomp sets condition on WISeR expansion; Connecticut bars AI-only denials on state plans; Sword buys Headspace; payers covering 165 million pledge ACCESS payment model

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Chris Klomp, nominated to be deputy secretary of the Department of Health and Human Services (HHS), told senators Wednesday that Medicare's WISeR AI prior-authorization pilot "must be done appropriately, or it should not expand." The statement came at his confirmation hearing before the Senate Health, Education, Labor and Pensions Committee, where Sen. Patty Murray questioned him on the program's records. Murray said the Washington state contractor denied more requests than it approved in its first three months, that the vendors are paid on the number of claims they deny, and that a Centers for Medicare & Medicaid Services (CMS) Office of the Actuary memo said participants would have an incentive to deny as many claims as possible. Klomp first said his understanding was that contractors are not paid by denial volume, then said there are penalties for inappropriate denials and that the CMS Innovation Center monitors them, before making the statement on expansion. Murray said she will do everything she can to stop the planned expansion into oncology. If confirmed, Klomp would run the department day to day. The hearing came one week after the Electronic Frontier Foundation (EFF) reported on about 1,000 pages of WISeR records.

In Connecticut, Comptroller Sean Scanlon announced five rules for the state employee and municipal health plans: no adverse determination may be made solely by an AI; AI may not be the sole basis for downcoding or a payment reduction; AI's material involvement in a benefit decision must be disclosed; members' data may not be used to train other models; and AI systems must undergo validation audits, with governance procedures disclosed to his office. The policy covers more than 270,000 people, and Scanlon said he will ask the legislature to extend it to every state-regulated plan in 2027. Downcoding was the practice two dozen revenue cycle leaders told Becker's Hospital Review on Tuesday they fear most.

Elsewhere, Sword Health agreed to buy Headspace for about one-tenth of Headspace's 2021 valuation. European Commission President Ursula von der Leyen, a physician, told the European Parliament that AI must empower doctors and not replace them, and promised a health initiative in November. Researchers at Harvard's Chan School and the University of Pennsylvania counted how often the company that built a digital health tool also ran its trial, and how that affected the results. In California, AB 1979 awaited action with 13 days left, and the Food and Drug Administration (FDA) press page listed nothing new since Tuesday's drug-development pilot.

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