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
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.
- Regulation Sept 16, 2026Murray's office posted the exchange from the Sept. 16 hearing. Murray said the Washington state contractor denied more requests than it approved in the first three months, that the vendors "are paid based on the number of claims they deny," and that a CMS Office of the Actuary memo warned participants would have an incentive to deny as many claims as possible. Klomp first said his understanding was that the contractors are "not" paid on denial volume; he then acknowledged financial penalties for inappropriate denials, said the Innovation Center monitors performance and agreed the program must be done appropriately or should not expand. Murray called the program one that "is really hurting patients" and said she would fight the planned expansion to oncology, which matches a June 2025 Innovation Center plan, contained in the records EFF reported on, that contemplated cancer treatment, MRI and air ambulance. Klomp, as deputy secretary, would oversee the program.
- Regulation Sept 16, 2026The Sept. 16 policy applies to the State Employee Health Plan and the Partnership Plan for municipal workers, with Anthem on medical, Cigna on dental, Aetna on retiree Medicare Advantage and Caremark on pharmacy, according to CT Mirror, which reported a Jan. 1, 2027, effective date. Under the five rules, no adverse determination may be "made solely by an AI system" and each must be reviewed by a human; carriers may not use AI as the sole basis to "downcode claims, reduce provider payments, or alter billing codes without human review"; disclosure is required when AI is materially assisting with or recommending a benefit or service; member data may not be used to train or develop other models; and AI systems must be validated for accuracy, consistency and fairness, with governance procedures disclosed to the comptroller. Scanlon said that "you and your doctor should make your health care decisions, not artificial intelligence," and that he plans to recommend the legislature extend the protections next session to all state-regulated plans, which CT Mirror said cover about 220,000 residents. Alabama, Georgia and Minnesota require human review of payer utilization decisions by statute; Connecticut's requirement comes through the plans' own rules for their carriers.
- Money Sept 16, 2026Sword Health said in a Sept. 16 release that the deal is all cash and should close at the start of the fourth quarter; the release does not give a price, and the figure of up to $300 million comes from the trade press. Headspace was valued at $3 billion when it merged with Ginger in 2021. Sword, a virtual physical-therapy company valued at about $4 billion, said it has treated more than 1 million people with what it calls AI Care and serves 2,500 organizations; Headspace brings a 15,000-provider network, 84 peer-reviewed studies and 20,000 employer clients, according to the companies' own figures. Headspace's chief executive described the target model as one that "brings in a human clinician when it is needed." Headspace is also an accepted participant in Medicare's ACCESS behavioral health track, which pays for technology-enabled care of depression and anxiety based on outcomes.
- Evidence Sept 17, 2026A group from the Harvard T.H. Chan School of Public Health and the University of Pennsylvania published the rapid review in npj Digital Medicine on Sept. 17, covering 229 randomized trials from 29 systematic reviews in nutrition, maternal health, mental health and sleep from 2013 to 2025. Developers took part in 73% of the trials. Developer-involved trials had 2.47 times the odds of being preregistered and, when weighted by sample size, higher odds of reporting a statistically significant result, an odds ratio of 1.23 with a confidence interval of 1.16 to 1.31. The authors called for independent efficacy trials, more transparent reporting and regulatory oversight. The domains studied were behavioral rather than diagnostic; the review did not cover ambient scribes or diagnostic agents.Source: npj Digital Medicine
- Regulation Sept 16, 2026In her Sept. 16 State of the Union address, the European Commission president, who trained as a physician, said she wants her doctor to have instant AI access to the data needed for the best diagnostic or treatment choice and does not want her doctor to be a robot, and she cited AI-supported mammography as the example of what Europe should scale. She named health as one of five sectors for industrial AI initiatives the Commission will announce in November, with no money or rules attached yet. Health Commissioner Olivér Várhelyi wants to use Europe's data and research infrastructure to speed adoption, Euronews reported. In Washington, officials have discussed paying company-run AI physicians 60% to 80% of the human rate, and the CMS administrator has promoted AI avatars for rural care.
- Regulation Sept 16, 2026In its ACCESS announcement Tuesday, CMS said three out of four people with Medicare now qualify for at least one track, that 18 clinical and patient societies back the model and that "major health payers representing 165 million Americans with Medicare Advantage, Medicaid, and private health insurance plans" have pledged to adopt an outcomes-based payment structure aligned to it. Fierce Healthcare counted 17 payers and reported that CMS is publishing sample provider agreements, standardized billing codes and reporting infrastructure so Medicaid programs can adopt the model, quoting Jacob Shiff, the Innovation Center's chief AI officer, as saying it was designed "from day one" for impact beyond Original Medicare. Heart failure, chronic obstructive pulmonary disease (COPD), substance use and nicotine dependence join the model in spring 2027. The structure that lets Headspace, Noom and WeightWatchers bill Medicare for chronic-condition management would extend to commercial and Medicaid contracts under the pledges, with payment tied to outcomes such as blood pressure and A1c.