The American Hospital Association has submitted policy recommendations to reduce regulatory barriers and promote responsible AI innovation in healthcare.
In response to a request for information (RFI) issued by the Office of Science and Technology Policy (OSTP) in September 2025, the American Hospital Association (AHA) outlined policy reforms to support artificial intelligence adoption in healthcare. The RFI is part of the Trump administration’s push for global AI leadership, seeking public input on how federal regulations may be hindering innovation.
The AHA argues that although AI holds great promise from improving diagnostics to reducing administrative burden existing regulations are limiting its potential. With hospitals facing severe financial pressures, including increasing administrative costs, the AHA says the current policy is contributing to instability, especially among smaller or rural hospitals.
In its submission, the AHA noted that nearly 25% of U.S. healthcare spending roughly $1 trillion annually is consumed by administrative tasks. Many member hospitals are operating at a loss, with about 40% reporting negative margins. The organization believes easing administrative and regulatory burdens would improve the ability of providers to invest in AI-powered tools.
The AHA identified four areas for reform:
The AHA also recommends full HIPAA preemption to simplify compliance and supports voluntary, consensus-based cybersecurity practices rather than new regulatory mandates.
Ashley Thompson, AHA’s senior vice president of public policy analysis and development, stated in the letter that excessive regulatory burdens are reducing access to care and forcing hospitals to scale back services. She noted that a patchwork of conflicting laws is complicating data-sharing and stifling innovation, while infrastructure limitations are leaving many rural providers behind.
The AHA praised the OSTP’s willingness to review regulatory barriers and reiterated its opposition to added requirements under proposed HIPAA Security Rule updates.
According to Becker’s Hospital Review, the American Hospital Association (AHA) urged the White House Office of Science and Technology Policy to “streamline and align federal regulations for artificial intelligence in healthcare,” warning that overlapping and inconsistent policies “threaten innovation and increase costs.” The AHA also objected to proposed federal cybersecurity requirements that would force hospitals to restore systems within 72 hours of a cyber incident, calling the timeline “not technically feasible” and potentially unsafe.
Instead, the organization continues to advocate for voluntary, consensus-based cybersecurity performance goals and unified federal guidance that aligns AI oversight with existing frameworks like HIPAA and FDA standards. The AHA’s position reflects its broader call for balanced regulation, one that promotes innovation and resilience without imposing unrealistic operational demands on hospitals already under financial strain.
HIPAA preemption would override conflicting state privacy laws with one federal standard. The AHA argues this would simplify compliance and allow hospitals to focus more resources on innovation and care delivery.
AI could streamline operations, assist with diagnostics, and automate routine tasks, but many smaller hospitals lack the infrastructure or funding to implement such tools without policy support or incentives.
These federal rules govern the confidentiality of substance use disorder (SUD) treatment records. The AHA says they limit providers’ ability to use AI to improve care for patients with SUD due to restricted data access.
The AHA believes the proposed updates could add cost and complexity without improving outcomes, and suggests using existing voluntary cybersecurity guidelines instead.
The AHA recommends cross-agency collaboration to develop grant programs and training initiatives that help patients understand and trust AI-enabled healthcare technologies.