Artificial intelligence is rapidly transforming the U.S. healthcare landscape, ushering in both promise and controversy as it takes on a growing role in patient care, administrative efficiency, and cost control. From AI-powered chatbots revolutionizing patient engagement to Medicare’s bold experiment with automated prior authorizations, the technology’s reach is expanding at a breakneck pace. But as hospitals, insurers, and government agencies embrace these digital tools, questions abound about patient access, safety, and the balance between innovation and oversight.
According to a comprehensive report published by Health & Safety Industry Today on December 4, 2025, the global healthcare chatbots market is experiencing explosive growth. Valued at $334.10 million in 2024, the market is projected to soar to $1.85 billion by 2032, reflecting a staggering compound annual growth rate of nearly 24 percent. This surge, analysts say, is driven by the increasing adoption of artificial intelligence (AI) and natural language processing (NLP) technologies in healthcare, coupled with the widespread embrace of telemedicine and the urgent need to automate administrative tasks.
“The Healthcare Chatbots Market continues to gain momentum as healthcare providers, insurers, and patients adopt AI-enabled platforms for instant communication, personalized support, and round-the-clock access to information,” the report notes. The data is striking: 80 percent of users accessed telemedicine at least once in 2022, an eight-point rise from the previous year, according to a July 2023 Rock Health report. As patients grow more comfortable with digital-first care, chatbots have become essential tools for everything from appointment scheduling and symptom triage to medication reminders and continuous monitoring.
But the AI revolution in healthcare is not limited to chatbots or administrative streamlining. In January 2026, the Centers for Medicare & Medicaid Services (CMS) will launch the Wasteful and Inappropriate Services Reduction (WISeR) Model—a pilot program that will test AI-powered prior authorizations for certain health services in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The program, set to run through 2031, will allow private companies to use AI to review requests for medical care, rewarding them financially when they deny unnecessary or non-covered services.
The move effectively introduces one of private insurance’s most unpopular features—prior authorization—into traditional Medicare, the federal health insurance program for people 65 and older and those with certain disabilities. Prior authorization requires patients and doctors to seek insurer approval before proceeding with specific procedures or prescriptions. While the intention is to curb waste and fraud, the practice has long drawn criticism from both physicians and patients for causing delays, denials, and added bureaucracy.
“Americans shouldn’t have to negotiate with their insurer to get the care they need,” said U.S. Health and Human Services Secretary Robert F. Kennedy Jr. in a June statement, reflecting the widespread frustration with prior authorization. Four days after Kennedy’s remarks, CMS rolled out the WISeR program, targeting services deemed particularly vulnerable to abuse—such as knee arthroscopy for osteoarthritis and incontinence control devices.
Physicians and advocates in the affected states have responded with alarm. Dr. Bindu Nayak, an endocrinologist in Wenatchee, Washington, told Stateline, “Medicare recipients are a vulnerable group. The WISeR program puts more barriers up for them accessing care. And they may have to now deal with prior authorization when they never had to deal with it before.” Nayak, who estimates that up to 40 percent of her patients are on Medicare, worries that the same problems seen with Medicare Advantage prior authorizations—delays, denials, and administrative headaches—will now spill into traditional Medicare. She employs staff whose sole job is to handle prior authorizations, underscoring the growing administrative burden.
The American Medical Association’s most recent report found that more than a quarter of physicians nationwide say prior authorization issues have led to serious patient problems, including hospitalizations or permanent harm. An investigation by the U.S. Department of Health and Human Services in 2022 revealed that 13 percent of prior authorization denials in Medicare Advantage plans were for requests that should have been granted under Medicare rules.
CMS officials have tried to reassure critics, stating that “licensed clinicians, not machines,” will make the final decisions on coverage denials. The agency also promises incentives for companies to make timely and accurate determinations. Abe Sutton, director of the CMS Innovation Center, defended the program by saying that the “low-value services” targeted by WISeR “offer patients minimal benefit and, in some cases, can result in physical harm and psychological stress. They also increase patient costs while inflating health care spending.”
Yet the financial incentives at play have raised eyebrows. In Oklahoma, for example, the pilot will be run by Humata Health Inc., backed by Blue Venture Fund and Optum Ventures—venture capital arms connected to major insurance companies. In Ohio, Innovaccer Inc., with Kaiser Permanente as an investor, will operate the program. Dr. Nayak voiced concern: “Virtix Health would have a financial incentive to deny claims. It begs the question, would there be any safeguards to prevent profit-driven denials of care?” Dr. Jayesh Shah, president of the Texas Medical Association, echoed these worries: “If, financially, the vendor is going to benefit by the denial, it could be a problem for our patients.”
Lawmakers have not been idle. In November, congressional representatives from Ohio, Washington, and other states introduced a bill to repeal the WISeR model, citing fears that it would saddle seniors with more red tape and restrict access to needed care. “The [Trump] administration has publicly admitted prior authorization is harmful, yet it is moving forward with this misguided effort that would make seniors navigate more red tape to get the care they’re entitled to,” said U.S. Rep. Suzan DelBene, a Washington Democrat and co-sponsor of the bill. Physician and hospital groups in affected states have rallied behind the legislation, hoping to at least delay the program’s rollout.
Meanwhile, the broader healthcare chatbots market continues to evolve. As detailed by Health & Safety Industry Today, chatbots are now being deployed for preventive care, chronic disease management, mental health support, and more. They are streamlining appointment booking, assisting with insurance verification, and even providing mental health counseling. North America leads the market, thanks to robust digital infrastructure and early adoption, while Europe and Asia Pacific are also seeing rapid growth.
Key players in the chatbot space include Your.MD Ltd., HealthTap Inc., Sensely Inc., Buoy Health Inc., Infermedica, Babylon Health, Ada Digital Health Ltd., Woebot Labs Inc., and major tech giants like Microsoft Corporation. These companies are racing to develop chatbots with improved accuracy, natural language understanding, and even emotional intelligence, aiming to deliver a more human-like experience and minimize user frustration.
Still, challenges persist. Data privacy, cybersecurity, and the risk of erroneous clinical guidance remain top concerns. Resistance among some providers, who fear over-dependence on automation and the potential erosion of the doctor-patient relationship, continues to be a barrier. Ensuring compliance with healthcare regulations and maintaining a balance between automation and human oversight will be crucial as the industry moves forward.
As AI becomes an ever-more prominent fixture in healthcare, its dual role as both innovator and disruptor is impossible to ignore. The coming years will test whether technology can truly deliver on its promise of better, more efficient care—without leaving patients behind.
