Daily Update for September 15, 2026

Show Notes

California awaits governor's action on AI practice bills; WISeR vendor under corrective plan; 72% of health systems report unsanctioned AI; Conifer cuts 1,037 billing jobs

The voices on this episode are generated, and so is the script, from the day's post at Physician in the Loop. Every fact in the post links to its source.

Read the post and its sources

California's governor has until Sept. 30 to act on Assembly Bill 1979, which would bar artificial intelligence (AI) from independently performing work that requires a licensed professional or directing unlicensed staff to do it. The bill applies to health facilities, clinics and physician offices; under its terms, an AI system could not direct medical assistants or other unlicensed personnel to carry out licensed duties. Its companion, AB 2575, would protect clinicians who override an AI system and bar developers from blaming those clinicians when the system fails.

The WISeR records, the Waystar sale process and the ACCESS expansion had been covered in the baseline report. The fuller WISeR records show one vendor under a corrective action plan and a Centers for Medicare & Medicaid Services (CMS) plan that considered extending AI prior authorization to MRI, cancer treatment and air ambulance, according to Fierce Healthcare and the Electronic Frontier Foundation (EFF). An Imprivata survey of 250 health system leaders found 72% have AI tools deployed without formal IT approval. Tenet's billing subsidiary is cutting 1,037 jobs, Healthcare Dive reported, and Tenet's chief executive has pointed to AI and offshoring. Waystar has hired Evercore to explore a sale, Reuters reported.

In this episode

• California AB 1979, barring AI from independently performing licensed clinical work, and companion AB 2575 await governor's action by Sept. 30
• WISeR records show Virtix under corrective action plan and a CMS plan that considered AI prior auth for MRI, cancer treatment and air ambulance
• Imprivata survey: 72% of 250 health system leaders report AI tools or agents deployed without formal IT approval; 28% have agentic AI in production
• Advocate Health pauses nursing ambient rollout; CIO says AI raises total health care costs; Penn Medicine cites about 30% pharmacy prior auth gains
• Knowtex opens health care AI lab, citing its own figures of 79 VA medical centers, 7,000 clinicians and 450,000 documentation hours saved
• Tenet's Conifer to cut 1,037 billing jobs by Nov. 2; WARN notice cites restructuring and technology initiatives, CEO has pointed to AI and offshoring
• Seven health system leaders tell Becker's autonomous AI needs narrow use cases, named accountability, escalation paths and developer liability
• Securities suit targets Hims & Hers over health data sharing with ad platforms and treatment practices; class period Aug. 4, 2025, to July 29, 2026
• Waystar hires Evercore to explore sale at about $4.8 billion; shares down 24% this year after Morgan Stanley AI disruption note

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Nora: This is Physician in the Loop, the daily briefing on AI in medicine. I'm Nora Davis.

James: And I'm James Hudson. It's Tuesday, September 15th, 2026.

Nora: California's governor has until September 30 to act on a bill that would bar AI from independently doing clinical work that needs a licensed professional.

James: No wiggle room on that date. Fifteen days.

Nora: I'm leading with California's AI bills, then the Imprivata survey on unsanctioned AI tools.

James: I've got the WISeR prior authorization records, and then Conifer's job cuts.

Nora: The bill is AB 1979, from Assemblymember Bonta. It would stop AI from independently performing work that needs a licensed professional, and from directing medical assistants or other unlicensed staff to do that work, in hospitals, clinics and physician offices.

James: So AI can still inform a decision, just not make it alone.

Nora: Right, a licensed professional has to keep final authority. Documentation, routine communications and supervised education are exempt. It would also put direct-to-consumer health chatbots that handle medical records under California's medical confidentiality law.

James: What about the companion bill?

Nora: That's AB 2575, from Ortega. It protects clinicians who override unsafe AI output, and it bars developers from shifting blame for AI-caused harm onto the workers using the system.

James: Who's for it, who's against it?

Nora: The California Nurses Association sponsored both. Hospitals, insurers and technology firms opposed them. They cleared the Legislature by August 31st. If signed, enforcement runs through licensing boards, effective January 1st, 2027.

James: And if he does nothing?

Nora: The post doesn't say. Just that September 30th is the deadline.

James: Next, the WISeR records. Fierce Healthcare and the Electronic Frontier Foundation got about 1,000 pages after EFF won a public records lawsuit.

Nora: What's in them?

James: One vendor, Virtix, denied more requests than it approved in its first three months. CMS put it on a corrective action plan.

Nora: What about the other vendor?

James: Innovaccer told CMS before launch it needed more time, and it was still working through backlogs in early April. Vendors and Medicare contractors also miscommunicated and mis-categorized requests. Low quality scores cut vendor pay by five to ten percent.

Nora: And the expansion EFF flagged?

James: EFF says CMS's Innovation Center had a June 2025 investment plan that considered adding services needing urgent authorization: air ambulance, cancer treatment, MRI, and medications without public coverage criteria.

Nora: Is any of that live?

James: Not according to the CMS WISeR page, updated September 10th. It still lists only the original categories, no expansion. CMS hasn't responded to the records.

Nora: Now the number in the headline. Imprivata surveyed 250 health system leaders responsible for identity security or AI strategy, and 72% said they have AI tools or agents deployed without formal IT approval.

James: Unsanctioned, meaning IT didn't sign off.

Nora: Right. 83% have AI across multiple departments, 28% have agentic AI in production, and 44% are piloting it. 79% expect agents to change clinical workflows significantly, 88% expect them to act with some autonomy, and only 17% think their current identity controls are adequate.

James: Worth saying Imprivata sells identity management software.

Nora: It does, those are the company's own figures. But Becker's reported that Advocate Health and Penn Medicine leaders described the same pattern at the same conference, Becker's Health IT.

James: What did they say specifically?

Nora: Advocate's chief information officer, Dr. Bobbie Byrne, paused an ambient documentation rollout for nurses. Turns out little inpatient nursing care happens by voice, nurses chart in structured flowsheets. She also said AI raises the total cost of health care, not for any one organization.

James: And Penn?

Nora: Dr. Mitchell Schnall cited roughly 30% efficiency gains in pharmacy prior authorizations. He said jobs change, and the system commits to retraining rather than guaranteeing roles.

James: That's a concrete number next to a lot of survey figures.

Nora: It's from Becker's Hospital Review, a different source than the Imprivata numbers.

James: Last story: Tenet's billing subsidiary, Conifer Health Solutions, is cutting 1,037 jobs. Healthcare Dive reported the layoffs take effect November 2nd.

Nora: What's the trigger?

James: CommonSpirit is exiting its 24% stake in Conifer, and its service contract ends October 30th. The WARN filing cites restructuring and technology initiatives.

Nora: And Tenet's CEO?

James: Has said AI and offshoring would lower Conifer's costs.

Nora: These are back-office jobs, not clinical, correct?

James: Right, the post is clear on that. It also notes no verified case of a U.S. health system cutting physician positions because of AI has been reported.

Nora: Good to keep those separate.

James: Yeah, worth being precise about what's actually AI and what's just a contract ending.

Nora: Before we go, two things to watch.

James: September 30th. That's the deadline for California's governor to act on AB 1979 and AB 2575.

Nora: If he signs, enforcement through licensing boards starts January 1st, 2027.

James: And November 2nd, the day Conifer's 1,037 layoffs take effect.

Nora: Same subsidiary whose contract with CommonSpirit already ended, back on October 30th.

James: Two different clocks, same company.

Nora: It's a lot of change for one billing operation to absorb in a short window.

James: A thousand jobs is a lot of change for anyone, and it's still framed as restructuring and technology, not one clean AI story.

Nora: Sources and corrections are at physicianintheloop.org. I'm Nora Davis.

James: I'm James Hudson. See you tomorrow.