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The U.S. Department of Health and Human Services announced Thursday that it plans to expand its use of artificial intelligence to police healthcare-related fraud by analyzing audit reports submitted by states and other federal health-dollar recipients. HHS said it will use ChatGPT and other AI tools to evaluate those reports from all 50 states on an ongoing basis, aiming to reduce fraud risks and save the government money.
The effort is led by Gustav Chiarello, the assistant secretary for financial resources, and it builds on HHS’s prior embrace of generative AI in investigations involving state Medicaid programs and in other administrative work. In the AP’s report, Chiarello said the new approach is meant to address a pattern in which audits arrive but problems often go unaddressed.
“It’s classic big government: Everyone files an audit and it lands with a thud and no one does anything about it,” Chiarello said in an interview. “Here, with AI, we’re able to dig into it.”
HHS said states and other recipients that spend at least $1 million in federal money a year are required to submit annual audits. The department said the initiative will use AI to analyze audits from HHS-funded programs, including state Medicaid programs and federal grantees in areas such as research and addiction services, among others.
Chiarello told reporters that the AI tools would evaluate public reports rather than uncover new information. He said the tools are intended to make grantees better stewards of federal dollars, and he described outreach to other federal agencies as well.
HHS also said it sent letters to governors and treasurers in all 50 states to notify them of the new initiative. One letter reviewed by AP said it serves as formal notification that HHS will no longer treat “chronic audit noncompliance, repeat deficiencies, material weaknesses, or delinquent audit obligations as matters that may remain unresolved through indefinite informal follow-up.”
The AP reported that the initiative was first reported by The Wall Street Journal and described broader anti-fraud pushback across multiple programs. It said the Trump administration and Vice President JD Vance’s anti-fraud task force have promoted crackdowns in the Medicaid and Medicare programs, and in other areas including student loan applications, with the efforts sometimes involving AI technology to flag likely fraud.
Critics have questioned both the administration’s approach and whether AI safeguards are sufficient. The AP said critics have blasted the anti-fraud effort, pointing to instances in which it targeted Democratic states and, at least once, reflected a tendency to attack first and gather facts later. The report also said that on at least one occasion the administration acknowledged to AP that it made a major mistake in data used to justify a New York Medicaid fraud investigation.
Asked about safeguards against the AI tools making mistakes, Chiarello emphasized that officials were evaluating public reports rather than uncovering new information. Rob Weissman, co-president of the consumer rights advocacy group Public Citizen, said he does not think the administration is seriously concerned about fraud, and he does not trust it to use AI tools in a fair and nonpartisan way.
“The AI is kind of beside the point when you assess what their actual objectives are, rather than what they pretend they are,” Weissman said.
HHS said Chiarello has been in touch with counterparts in other federal departments and suggested that other agencies could adopt similar technology. “It would be fairly easy for the other agencies to use our technology and jump on it,” he said.