Healthcare AI Update
In the past couple of weeks, there has been a slew of artificial intelligence (AI) news. Sadly, despite all this noise, from the perspective of a medical practice, there is still no clear progress on key issues, including how AI-enabled medical services will be reimbursed by Medicare, who will provide oversight of the growing footprint of AI (particularly regarding cybersecurity incidents), and who is liable if something goes wrong.
Below is a curated vetting of the most relevant news for medical practitioners.
Growing Scope of AI in Healthcare
Nolla Health announced today that it is launching the nation's first AI-powered prescription app, which will operate in Utah. The app will be able to prescribe, not just perform refills.
The pilot is limited to eight prescriptions/treatments for acne, and there are an estimated 5,500 to 11,000 potential users in Utah. Nolla Health’s program will operate in three stages. A physician will review the first 100 patients’ AI-generated prescriptions before submitting them to a pharmacy. The AI will submit the next 400 patients’ prescriptions to pharmacies, and a physician will review them retrospectively each week. After that, a physician will review at least 10% of the total prescriptions issued once a month.
While limited in scope, it is notable for the level of independence under which AI will operate.
Trump Administration
AI is the latest target of President Trump’s rebranding campaign. Yet, no matter what you call it, he still supports limited oversight.
Renaming AI: President Trump sought to replace the term “artificial intelligence” with “super intelligence.” He signed an executive order on September 29 that formalized the change, which will require all federal agencies to use the new term.
AI Task Force Formed: Over the weekend, the administration announced a new AI task force, the “Super Intelligence Task Force,” with the dual goals of ensuring the U.S. leads in AI and protecting the country from national security threats. It will be led by the Director of National Intelligence, Jay Clayton, who has previously argued against a nationwide slowdown in AI. This suggests the President continues to support a hands-off approach to AI oversight. It was reported that even some Republicans in Congress were not informed ahead of time and were surprised by the announcement of this new AI Task Force.
America.gov: President Trump unveiled America.gov, a new AI-powered government website, on September 29, ahead of a meeting with AI executives. The site aims to simplify information across 29,000 government websites – including the Centers for Medicare and Medicaid Services (CMS). He signed an executive order directing agencies to integrate their relevant systems with America.gov. Reports say that during that meeting with AI executives, he “pushed back against new government regulations and instead called for 'tremendous self-regulation' by tech companies.” Politico reported that “Tech executives signed a ‘morally binding’ constitution on artificial intelligence during a White House lunch Tuesday, President Donald Trump told reporters following the event.”
United Nations Declaration: The United States did not join 22 nations, including several European countries, that adopted a declaration at the recent United Nations General Assembly stating that AI “must remain under human direction, oversight and control” and suggesting the creation of a global supervisory regime. The declaration acknowledged AI’s “potential to improve lives, advance science and strengthen our economies” but warned that “the rapid development of frontier AI models poses serious risks to safety and security if not appropriately managed.”
Congress
In recent weeks, generally Democratic members of Congress have introduced AI-related legislation. The legislation generally seeks to increase guardrails and oversight and to slow the pace of AI development, all of which are counter to the Trump Administration’s approach. The fate of this legislation may depend on the midterm election outcome.
Speaking of the midterms … a comprehensive analysis published by The New York Times found that OpenAI- and Anthropic-aligned groups spent $55.7 million combined in 46 primary contests.
Now, to the recently introduced AI-related legislation.
Hitting Pause on AI Development: On September 23, Senator Bernie Sanders (I-VT) and Representative Greg Casar (D-TX) introduced the Ban Artificial Superintelligence Act. The bill aims to slow AI development. It permanently prohibits developing or deploying AI systems that surpass human cognitive performance across most domains, or that could disempower or endanger humanity (such as subverting shutdown commands or overriding governments). It also freezes high-level, advanced AI development until a new federal regulatory framework is fully active and able to review models.
Emergency Kill Switch: On September 24, Rep. Tom Kean, Jr. (R-NJ) and Sen. John Kennedy (R-LA) introduced the AI Emergency Button Act,which would require AI developers to include an emergency kill switch.
Regulatory Oversight: Several pieces of legislation addressed overall oversight.
Two recently introduced bills would create oversight boards. On September 24, Sens. Brian Schatz (D-Hawaii) and Mark Warner (D-Va.) introduced the Artificial Intelligence Risk Management and Security Act. Also on September 24, Sen. Ed Markey (D-Mass.) introduced the Cybersecurity and AI Board of Investigations Act. The bill would establish an independent board with subpoena power to investigate cybersecurity incidents, including those involving AI.
On September 23, Sens. Michael Bennet (D-Colo.) and Peter Welch (D-Vt.) introduced the AI Regulatory Act. The bill would establish a new, independent agency to regulate frontier AI models and social media. The legislation would create a Federal Digital Commission with authority to order AI companies to pause development for up to six months, designate major tech platforms for additional oversight, set safeguards for frontier AI, and impose penalties for noncompliance.
Stakeholders
As frustration grows over a lack of federal leadership, stakeholder groups are organizing independently.
AI Deployers Group: A new trade group launched in September 2026 by a group of Fortune 500 companies to give a voice to AI "deployers" in Washington policy discussions. The organization aims to provide a unified voice and perspective for organizations that deploy AI technologies, rather than just build or develop them. Of the seven organizations announced so far, one appears to be medical-related: Pfizer.
Security-Focused Group: JPMorgan Chase CEO Jamie Dimon chairs the newly expanded Alliance for Critical Infrastructure (ACI), a cross-industry group of nearly 50 major corporate leaders addressing AI security risks.
AI and Healthcare Costs and Workforce Issues
In recent weeks, debate has centered on whether AI is driving up healthcare costs. On September 24, The New York Times published Battle of Hospital A.I. vs. Insurer A.I. Is Pushing Medical Costs Higher, which argued that hospitals' and health insurers' use of AI is escalating their longstanding feud over medical care costs. The article cited a Blue Cross Blue Shield report that found hospitals’ use of A.I. drove nearly $1 billion in additional expenses over two years. The report linked more patients being documented as having complex conditions to higher spending.
Dr. Oz responded to these reports during a meeting last week, noting that things will get worse before they get better. “Short term, AI is going to be inflationary because it’s going to turbocharge the ability of the current billing systems to work more effectively,” Oz said at Oracle’s annual health and life sciences summit in Orlando. Oz said he hoped AI would lower healthcare costs in the long run and that the government was relying on one particular area to make that happen: accountable care organizations.
Regarding workforce issues, an analysis released by Covista estimates that AI could close 37% of the projected healthcare workforce gap by 2040 without replacing a single worker, largely by automating documentation, referrals, medication lists, billing, and other administrative tasks.
Since we are talking about workforce issues, in the latest example of Secretary of Health and Human Services (HHS) Robert Kennedy, Jr., saying something to annoy physicians, at a Make America Healthy Again (MAHA) conference last week, he stated the public should trust AI over public health experts' advice on vaccines and other issues. In response, six physician organizations released a joint statement saying such statements risk undermining trust in physicians. The statement did not mention RFK directly.
That’s all your AI news for now, until next time!
For more information and questions, please contact:
Sheila Madhani
Madhani Healthcare Consulting
Email: smadhani@madhani-health.com
Tel: (202) 679-2977