Source: JD Supra

The JD Supra article examines the accelerating adoption of Artificial Intelligence (AI) in home health and hospice sectors and the corresponding increase in regulatory risk, effective in 2025. While AI promises to reduce documentation burdens, spot patient decline earlier, and ease workloads, its careless deployment creates new legal exposure under existing regulations like Section 1557 nondiscrimination rules, HIPAA obligations, and Centers for Medicare & Medicaid Services (CMS) reimbursement scrutiny. Federal agencies and state legislatures are holding AI that touches Medicare or Medicaid patients to a high standard of safety, fairness, and transparency, though no single federal AI law for healthcare exists yet.

The article highlights common AI failure points that trigger audits, denials, False Claims Act exposure, breach allegations, and malpractice risk, especially when human oversight is inadequate. These failure points include the use of unauthorized consumer Large Language Models (LLMs) that ingest Protected Health Information (PHI), biased algorithms that lead to disparate impact on protected groups due to flawed logic (e.g., zip code proxies for socioeconomic status), and inaccurate documentation from ambient scribes missing critical context. These are not hypotheticals, as variations have already surfaced in audits and complaints.

To navigate this frontier, providers are mandated to strengthen their AI governance and transparency. Key protective measures include implementing enterprise-grade vendor controls, securing Business Associate Agreements, establishing patient disclosure and consent protocols, conducting model-bias testing, ensuring workforce training, and creating a comprehensive AI Acceptable Use Policy backed by ongoing monitoring and human oversight. The core message is that AI can transform care only if deployed thoughtfully, with safety, fairness, and transparency held to a high standard, particularly when dealing with vulnerable elders and those at the end of life, ensuring compliance without jeopardizing trust.