HEALTH AI Act targets healthcare’s administrative burden with federal funding

Representative Ted Lieu has introduced groundbreaking federal legislation that could reshape how artificial intelligence transforms American healthcare. The Healthcare Enhancement And Learning Through Harnessing Artificial Intelligence Act, known as the HEALTH AI Act, establishes the first dedicated federal grant program specifically designed to fund research into generative AI applications across the healthcare sector.

This legislative initiative arrives at a critical moment when healthcare providers face mounting administrative burdens, widespread clinician burnout, and persistent disparities in patient care quality. The bill, designated as H.R. 5045 and introduced on August 26, 2025, currently has one cosponsor and awaits consideration by the House Committee on Energy and Commerce.

What the HEALTH AI Act establishes

The legislation directs the Secretary of Health and Human Services to create a comprehensive grant program that will provide federal funding to eligible research institutions. These grants specifically target the development and implementation of generative artificial intelligence—AI systems that can create text, images, computer code, and other content based on input data—within healthcare settings.

Unlike general AI research funding, this program focuses exclusively on practical applications that can immediately improve patient care and reduce the operational challenges plaguing modern healthcare systems. The approach recognizes that while AI shows tremendous promise in healthcare, targeted research funding is essential to translate theoretical capabilities into real-world solutions.

Priority research areas and applications

The HEALTH AI Act identifies several specific areas where generative AI research could deliver substantial improvements to healthcare delivery:

Enhanced clinical documentation represents one of the most immediate opportunities. The legislation supports research into AI systems that can help healthcare providers take more detailed patient notes and generate relevant questions during medical visits. This addresses a persistent challenge where physicians often spend more time documenting encounters than actually treating patients.

Administrative burden reduction forms another core focus area. The bill prioritizes research into AI applications that can streamline the extensive paperwork and documentation requirements that currently consume significant portions of clinicians’ time. This includes everything from treatment summaries to regulatory compliance documentation.

Insurance claims processing acceleration receives dedicated attention, with research funding directed toward AI systems that can speed up the notoriously slow and complex health insurance claims process. Faster claims processing directly benefits both healthcare providers and patients by reducing payment delays and administrative overhead.

Customer service improvements within healthcare settings also qualify for funding, supporting research into AI-powered systems that can enhance patient interactions, appointment scheduling, and general healthcare navigation assistance.

The legislation includes a flexible provision allowing the Secretary of Health and Human Services to identify additional healthcare improvement areas as AI capabilities evolve and new applications emerge.

Grant prioritization criteria

When evaluating grant applications, the legislation establishes clear priorities that reflect current healthcare challenges and equity concerns. The Secretary of Health and Human Services must prioritize funding for entities that demonstrate commitment to several key objectives.

Industry-wide AI adoption receives top priority, with preference given to research projects that promote broader implementation of generative AI throughout the healthcare sector rather than isolated pilot programs. This approach aims to create scalable solutions that can benefit the entire healthcare ecosystem.

Professional training and development represents another priority area, recognizing that successful AI integration requires comprehensive education programs for healthcare workers. Grant recipients must demonstrate plans for training healthcare professionals to effectively utilize AI tools in their daily practice.

Addressing clinician burnout has become a critical healthcare challenge, with studies showing that administrative tasks contribute significantly to physician and nurse exhaustion. The legislation prioritizes research projects specifically designed to reduce the workload pressures that drive talented healthcare professionals away from patient care.

Reducing health outcome disparities across gender, racial, and ethnic lines receives dedicated attention. Priority goes to projects that demonstrate how AI applications can help eliminate the persistent gaps in healthcare quality that affect different demographic groups.

Improving access for underserved populations rounds out the priority criteria, with preference for research that shows how AI can extend quality healthcare services to communities that currently face barriers to medical care.

Eligible participants and definitions

The legislation carefully defines who can participate in this grant program. Eligible entities include higher education institutions, qualifying nonprofit organizations, and various government agencies. This broad eligibility ensures that research can occur across academic, private, and public sectors while maintaining appropriate oversight and accountability.

The bill incorporates established definitions from existing legislation, including the National Artificial Intelligence Initiative Act of 2020 for its AI terminology and the Public Health Service Act for defining medically underserved populations. This approach ensures consistency with existing federal programs and regulatory frameworks.

Industry implications and potential impact

The HEALTH AI Act could significantly influence major technology companies already investing heavily in healthcare AI development. Companies like Alphabet, which operates various healthcare technology initiatives through its Google division, may find new opportunities to collaborate with research institutions receiving federal grants.

Amazon’s expanding healthcare services portfolio, including its telehealth and pharmacy operations, could benefit from AI developments funded through this program. Similarly, Microsoft’s substantial investments in AI research and healthcare solutions position the company to potentially leverage findings from federally-funded research projects.

However, the legislation’s focus on research rather than direct commercial development means that immediate business impacts will likely emerge through academic partnerships and collaborative research arrangements rather than direct government contracts.

Legislative timeline and next steps

The HEALTH AI Act currently awaits consideration by the House Committee on Energy and Commerce, which oversees healthcare policy and technology regulation. The committee will likely examine the bill’s funding mechanisms, oversight provisions, and alignment with existing healthcare AI initiatives before advancing it for broader House consideration.

The legislation represents part of Representative Lieu’s broader technology policy agenda, which includes recent bills addressing facial recognition regulation, workplace surveillance protections, and renewable energy for U.S. territories. This pattern suggests a comprehensive approach to emerging technology governance rather than isolated policy initiatives.

Addressing current healthcare AI challenges

The timing of this legislation reflects growing recognition that while AI shows tremendous promise in healthcare, realizing that potential requires coordinated research and development efforts. Current healthcare AI applications often remain fragmented, with individual institutions developing isolated solutions that don’t scale across the broader healthcare system.

The federal grant program structure addresses this challenge by encouraging research that can be widely implemented rather than proprietary solutions that benefit only single organizations. This approach could accelerate the development of standardized AI tools that improve healthcare delivery nationwide while ensuring that innovations reach underserved communities and address systemic healthcare disparities.

The HEALTH AI Act represents a significant step toward systematic federal support for healthcare AI development, potentially establishing the United States as a global leader in medical AI innovation while directly addressing the operational challenges that currently strain American healthcare systems.