New York's Montefiore Hospital Lays Off 12 Nurses, Replaces Them With AI

Montefiore Health System, one of the largest hospital systems in New York, has laid off 12 nurses working at three facilities in the Bronx and is replacing their work with artificial intelligence software. The nursing union NYSNA says it is one of the first documented cases in the United States in which licensed nursing positions have been directly eliminated and replaced by an AI system.

The laid-off nurses worked in the utilization review department. Their job was to analyze patients' medical records and prepare justifications for insurance companies confirming that the treatment provided was medically necessary and eligible for reimbursement. It is clinically demanding work, since the outcome determines whether an insurer covers a patient's treatment costs or denies payment.

What's Replacing the Nurses

The hospital is rolling out a system built by Datavant, described by Montefiore's management as an administrative tool that streamlines document processing rather than a system making clinical decisions about patient treatment. The union says this distinction is misleading, since final verification of whether an insurer's denial is justified has, until now, rested with a licensed nurse familiar with the clinical context of the case.

Contract Dispute After the Strike

The layoffs are controversial mainly because of their timing. Earlier this year, New York hospitals were hit by a 41-day nurses' strike that ended with the signing of a three-year collective bargaining agreement. The agreement included a clause protecting union jobs from the effects of AI deployment: if the use of AI were to reduce the number of union-covered positions, hospital management was required to first meet with the union and jointly look for ways to avoid such a scenario.

NYSNA says Montefiore violated this clause by sending termination notices without prior consultation. On June 1, 2026, the union filed a class-action lawsuit over the matter. Hospital management denies the allegations, calling NYSNA's claims false and misleading, and says the facility continually invests in new technology to give patients the best possible care.

What we want from Montefiore is simple: stop the layoffs, keep a licensed nurse making the final call - Marilyn Shuler, a utilization review nurse with 39 years at Montefiore

Artificial intelligence should never replace a nurse's real human care - Nancy Hagans, president of NYSNA

Patient Safety Concerns

The union warns that removing a licensed nurse from the final stage of reviewing insurance denials could strip patients of an important layer of protection at moments when an insurer disputes the necessity of treatment. Until now, it was the nurse's clinical judgment, not automated document analysis, that effectively pushed back against denials in complex medical cases. NYSNA representatives stress the case could set a precedent for other hospitals nationwide weighing similar deployments.

The case has also drawn attention from local Bronx politicians, who have publicly backed the laid-off workers. For the union, it is part of a broader campaign against replacing medical staff with AI systems without prior negotiation, despite formal provisions in collective agreements meant to prevent exactly that.

Implications for Healthcare Jobs

The Montefiore case fits into a broader trend of automating administrative functions in healthcare, where AI systems are increasingly taking over tasks tied to documentation, billing, and communication with insurers. Unlike earlier deployments meant to support medical staff, here artificial intelligence directly replaced specific, licensed positions, making the case a test for similar protective clauses negotiated by unions elsewhere in the sector.

Sources: NYSNA - The Bronx Needs Real Nurses, Not AI! (nysna.org), 12 Nurses Laid Off and Replaced by AI at This NYC Hospital, Union Says (nurse.org), New York hospital replaces 12 nurses with AI, prompting warnings over patient care dangers (techspot.com)