Summary
CMS issued an HPMS memo with FAQs on implementation of the 2024 Medicare Advantage and Part D final rule (CMS-4201-F), including clarifications on the use of algorithms and artificial intelligence in coverage determinations and utilization management. The memo explains that MA organizations and other plans may not use algorithms or AI as the sole basis for denying, terminating, or downgrading services and must base decisions on an individual enrollee’s medical history, provider recommendations, and relevant clinical notes.
Healthcare Implications
It operationalizes CMS’s MA rule for plans that use AI or algorithmic tools in utilization management by reinforcing that human clinical judgment and individualized assessment are required. Plans must evaluate and monitor AI-enabled UM tools for compliance with Medicare coverage criteria and nondiscrimination obligations, which may reduce inappropriate denials, promote more consistent coverage decisions, and shape how vendors design AI-driven utilization management products.