Twelve Montefiore Nurses Laid Off and Replaced by AI Software, Union Says

Twelve Montefiore Nurses Laid Off and Replaced by AI Software, Union Says

Marilyn Shuler has spent 39 years as a nurse at Montefiore Medical Center in the Bronx, the last stretch of them in a quiet, unglamorous role that patients rarely see: utilization review, the work of reading through charts and convincing insurers that the care a patient is receiving is medically necessary and covered. This month, according to her union, Montefiore told Shuler and 11 of her colleagues that a piece of AI software would be doing that job instead.

"What we want from Montefiore is simple: stop the layoffs, keep a licensed nurse on the final review, use AI to support us instead of replacing us, and sit down with the nurses who actually do this work," Shuler said in a statement circulated by the New York State Nurses Association (NYSNA).

The union says Montefiore moved to lay off 12 utilization-review nurses across three of its Bronx campuses by roughly July 12, shifting their responsibilities to AI-powered software from the health-data vendor Datavant. It is one of the first high-profile instances of a major U.S. hospital moving to hand a licensed nursing function to automated software, and nurses around the country are watching how it lands.

What the nurses do, and why the union is fighting

Utilization review sits at the seam between medicine and insurance. When a physician orders a hospital stay, a procedure, or continued care, a utilization-review nurse examines the file and builds the case to the insurer that the treatment is warranted and reimbursable. Get it wrong, and a patient can be saddled with a denied claim or discharged before it is safe; the hospital, meanwhile, can lose reimbursement. NYSNA argues that stripping a licensed clinician out of that final judgment and replacing it with software is a patient-safety problem, not merely a labor dispute.

"Our patient population deserves better than this," said Ajita Mathew, a Montefiore nurse, who added that it remains unclear to nurses how the technology will affect the rate of insurance denials. Shaiju Kalathil, a registered nurse and NYSNA executive committee member at Montefiore, called the plan a contract violation that should "concern every practitioner and patient who cares about the future of healthcare."

The contract is central to the union's case. NYSNA filed a class-action grievance on June 1, alleging that Montefiore violated the collective bargaining agreement by issuing layoff notices without first meeting with the union. That agreement, which the union has celebrated as containing safeguards against artificial intelligence "for the first time," was won after a bruising 41-day fight and includes language requiring that if AI causes a "diminishment" of union jobs, management must sit down with the union to discuss how to avoid it. The union says that meeting never happened before the notices went out.

NYSNA has also raised alarms about the vendor. Datavant, a private-equity-backed company, has reported partnerships with Palantir, the data-analytics firm widely used by Immigration and Customs Enforcement. The union warns that sensitive medical records, potentially including information bearing on immigration status, could be exposed. It also points to a $900,000 class-action settlement reached by Ciox Health, which does business as part of the Datavant Group, over a 2024 email breach involving personal, financial, and health information.

The hospital's position

Montefiore rejects the union's framing. A hospital spokesperson, Joe Solomonese, said "the claims by NYSNA are inaccurate and misleading," and that Montefiore is "always investing in new technology to ensure the best care and outcomes for our patients." The hospital has cast the change as part of ordinary technology modernization rather than a wholesale removal of nurses from clinical decisions. It has not, in public statements, conceded that patient reviews will be left entirely to software without clinician oversight, and the specifics of how Datavant's tools will be deployed remain contested between the two sides.

Why this matters

Health systems everywhere are under pressure to cut administrative costs, and utilization review, sitting adjacent to billing rather than the bedside, is an obvious early target for automation. That is exactly why this fight is being watched so closely. If a hospital as large as Montefiore can reassign a licensed-nurse function to an AI vendor over a union's objection, it establishes a template others may follow. The dispute also tests whether the AI-protection clauses unions have only recently begun winning at the bargaining table have real teeth, or whether they can be routed around with a layoff notice. And it puts a concrete question on the table that regulators have largely not answered: who is accountable when an algorithm, rather than a clinician, decides that care is or is not "medically necessary"?

What to watch

The immediate flashpoint is NYSNA's grievance and whether it forces Montefiore back to the table or heads toward arbitration. Watch for any regulatory or legislative interest from New York officials, given the ICE-adjacent data concerns and the patient-safety stakes; for whether denial rates shift once the software is in place; and for whether other hospital systems cite Montefiore as precedent. For a workforce that just waged one of the largest nurse strikes in New York City history, the outcome will signal how much the contract language they fought for is actually worth.