NEW YORK — The Department of Health and Human Services announced it will use artificial intelligence, including ChatGPT, to analyze audit reports from all 50 states and other recipients of federal health dollars on an ongoing basis. The department said the initiative is intended to tamp down risks of fraud and save the government money.

The program will review audits from HHS-funded programs, including state Medicaid programs and federal grantees in research and addiction services. States, local governments, nonprofits and higher education institutions that spend at least $1 million in federal money a year are required to submit annual audits. Recipients that do not file the required audit reports or resolve identified problems could face a loss of funding.

HHS said it has sent letters to governors and treasurers in all 50 states alerting them to the new initiative. One of the letters reads, "This letter serves as your 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."

Gustav Chiarello, the assistant secretary for financial resources leading the new AI audit program, said the tools were intended to make grantees better stewards of federal dollars. "Everyone files an audit and it lands with a thud and no one does anything about it," he said. "Here, with AI, we're able to dig into it."

Chiarello said he has been in touch with his counterparts in other federal departments and hopes they follow his lead. "It would be fairly easy for the other agencies to use our technology and jump on it," he said.

The department has embraced generative AI for investigating state Medicaid programs, automating administrative tasks and editing text. The Trump administration and Vice President JD Vance's anti-fraud task force have spent recent months promoting efforts to crack down on fraud in Medicaid and Medicare programs as well as in student loan applications and other areas. Federal Trade Commission Chairman Andrew Ferguson said recent efforts have involved using AI technology to flag likely fraud. On at least one occasion, the administration acknowledged it made a major mistake in data used to justify a New York Medicaid fraud investigation.

Rob Weissman, co-president of the consumer rights advocacy group Public Citizen, questioned the rationale for the program. "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.