Ocasio-Cortez Fights Trump Program That Would Give For-Profit Companies Financial Incentive to Reduce Care

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Washington, D.C.- Today, Representative Alexandria Ocasio-Cortez (NY-14)continued to fight against corporate greed by for-profit health insurance companies, including those that operate Medicare Advantage plans.

Health insurance companies frequently require prior approval for care, commonly known as prior authorization, to reduce health care costs and increase their profits. In June, the Trump administration announced their plans to launch a new program that would expand prior authorization in Traditional Medicare. That program, called the Wasteful and Inappropriate Services Reduction (WISeR) model, will bring in for-profit companies to review prior authorization requests with AI, and give them a cut of the savings when care is denied.

Find Representative Ocasio-Cortez's remarks as delivered below:

"Thank you so much, Madam Chairwoman.

And thank you to our witnesses for being here today. And I want to kind of dig into a topic that's come up several times over the course of this hearing, which is this area of Prior Authorization. Now generally, I'd like to take a step back so that folks at home can kind of understand what it is exactly that we're talking about here.

I think most people hear the term prior authorization, and understandably, our eyes start glazing over in this bureaucratic language. But in the way that this affects our lives is that if someone is diagnosed with a condition, an illness, a disease, they require medication, treatment of some kind, their doctor may recommend it to them.

And that doctor has to very often, depending on their insurance, ask their insurance for permission. So that their insurance can say, we will cover this treatment or we will not cover this treatment. And that is the process known as prior authorization. Is that in a fair description of it, Doctor Mello?

It is. And I would just add that it also applies to procedures and surgeries.

Yes. And prior authorization oftentimes can be a really big headache and pain point for patients and doctors. And especially if you have interacted with a for-profit health insurance company, although all sorts of health insurance companies use a prior authorization, you've likely dealt with this.

And there have been famously, I think, videos that have circulated on social media of doctors trying to haggle with an insurance company, of everyday people trying to navigate their chemotherapy or any other sort of condition with the prior authorization system. And if you have a Medicare Advantage plan, which is the for-profit version of Medicare, you've definitely dealt with prior authorization.

In fact, in 2023 Medicare Advantage for-profit health insurers filed over 100 times more prior authorization requests than traditional Medicare and Medicare Advantage plans also deny care to patients at significantly higher rates than normal. Medicare Advantage plans, deny as much as 16 times the normal rate. Does this sound consistent with some of what you've seen, Dr. Mello?

Yes, I believe that's what numerous reports have indicated.

And this is all to restrict patient care because we have a profit margin to maintain. And many of those for-profit insurers use unregulated and unsupervised AI models to review prior authorization requests.

And I think it's very important that people understand that this is happening, that AI is being rolled out in the industry, so that when a doctor who has gone through four years of medical school, in addition to their additional training, say that a patient needs something and they submit a prior authorization request many times an AI model may deny them that care to a human being who has gone through extensive medical training.

Now, Mr. Toy, you said earlier in this hearing that you are the CEO of Clover Health. But you've said in this hearing that Clover Health does not use AI in your company to implement prior authorizations, correct?

Correct.

But you have seen this happen in your industry?

That's correct.

And you disagree with this usage? Why?

I disagree with it because it should always be a clinician who's making this decision. So I myself, as I said, I'm also a patient, I have had my own scans be denied through prior authorization. And, I fortunately have the sophistication to navigate my own appeal, as you said, to get there. But that is not a reasonable thing for it to happen.

And for a person that is diagnosed with a condition in which time is of the essence and an AI model has denied a trained clinician the ability to provide them care, this could potentially threaten a person's life, correct?

Absolutely. Timely care is critical in many cases.

And so we are seeing certain health care companies, and on top of that, the Trump administration has planned to launch a new program to expand the use of AI in prior authorizations, known as WISeR, beyond Medicare Advantage and into regular Medicare recipients. Mr. Toy, it is not your company's plans to participate in the WISeR program, correct?

That's correct. We are not participating.

And you have no plans to?

And we have no plans to.

Thank you very much. And I yield back my time."

In July, Congresswoman Alexandria Ocasio-Cortez (NY-14)and Congressman Lloyd Doggett (TX-37)led 40 colleagues in sending a letterto the Centers for Medicare & Medicaid Services (CMS) urging them to reject any efforts to expand prior authorization in Traditional Medicare. In May, reports from The Guardianalleged UnitedHealth Group was endangering patients in an effort to maximize their profits from the Medicare Advantage program. Congresswoman Ocasio-Cortez and Congressman Doggettsubsequently sent a letterto Attorney General Pam Bondi calling on the Department of Justice to expand its criminal investigation into UnitedHealth Group to include reports that the company is deliberately reducing access to care in order to pocket more money from the federal government.

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