Efforts are underway to apply AI to reduce improper payments in programs such as Medicare, Medicaid and Social Security. Image: zimmytws/Shutterstock.com
Greater use by federal agencies of AI holds the potential for cutting personnel and other costs, a Congressional Budget Office report has said, but the picture is more uncertain regarding its potential impact on rates of improper payments and revenues.
“The increased labor productivity projected from AI’s use in the private sector could be realized for the federal workforce or federal contractors through efficiencies (and cost reductions) in how the federal government operates or delivers services,” it said. “One example is AI’s support for, and potential replacement of, staff in the call centers of programs operated by the General Services Administration, Internal Revenue Service, and Department of State.”
It noted that efforts are underway to apply AI to reduce improper payments in programs such as Medicare, Medicaid and Social Security. “By analyzing billing data and determining the characteristics of reimbursement claims that are likely to be incorrect or fraudulent, AI could help identify and reduce unwarranted federal payments and, as a result, lower spending,” it said.
However, “the technology could also be used by individuals to perpetrate fraud. For example, AI could be used to create fake images for falsified documents.”
Regarding revenue, it similarly noted that the IRS already is using AI to improve its estimates of underpaid taxes, and “if the agency was able to use that information to increase compliance with tax laws, revenues would increase.”
“AI could be used to reduce revenues as well. One way that might happen is if businesses and corporations used AI to reduce their tax liability. Some areas of tax law are particularly complex, and AI could be used to legally decrease tax payments by identifying aspects of the tax code that a person might miss,” it said.
“Overall, the ultimate impact of AI on federal revenues and spending is uncertain,” it concluded.
The report was dated in December but only recently released by the House Budget Committee Republican leadership. A statement said that AI could “help maximize government productivity while reducing government spending. However, in order to use these revolutionary technologies to ensure sound fiscal governance, much research needs to be done on how to best apply AI.”
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