Cyprus’ General Healthcare System, GESY, is entering a new phase of supervision, with the Health Insurance Organisation (HIO) formally turning to artificial intelligence as part of its effort to rein in abuse and misuse that have long burdened the system. The move comes against the backdrop of steadily rising expenditure. From around €1.21 billion in 2021, the GESY budget climbed to almost €1.8 billion in 2025, reflecting both the breadth of services offered and the scale of resources managed by the HIO. As the system’s financial footprint grows, the need for more effective and targeted oversight becomes increasingly pressing.
Pilot phase in early 2026
The introduction of artificial intelligence is expected to begin in the first quarter of 2026, initially as a pilot project, with full operational deployment planned for 2027. The investment, estimated at around half a million euros, is not presented as a replacement for existing control mechanisms but as a reinforcing tool in an environment where the sheer volume of data makes early detection of irregularities increasingly difficult.
From a planning perspective, 2026 will be a testing year. The system will run on a pilot basis, trial deviation-detection rules and feed targeted alerts to human audit teams, before transitioning to a fully integrated operating model.
High-impact areas under scrutiny
The initial use of artificial intelligence will not be applied across the board. According to the HIO, the focus will be on areas with high financial impact and a large volume of acts, which expose the system to a greater risk of deviations and abusive practices.
Physiotherapy and rehabilitation services are among the first targets. Here, the concern is less about the cost of individual sessions and more about frequency and duration. These are highly repetitive services that absorb tens of millions of euros each year. Systematic exceedance of the expected number of sessions per diagnosis can translate into significant cumulative costs. As a result, cases involving unusually high numbers of sessions or practices that do not align with declared working hours or the nature of the condition will be closely examined.
Imaging examinations are another key focus. MRI and CT scans are among the most expensive medical acts per examination. The HIO’s 2024 budget earmarked roughly €50 million for diagnostic imaging, making the sector particularly sensitive to over-referrals or poorly justified tests. Attention will centre on referral patterns, especially when examinations are repeated without clear clinical justification or diverge sharply from the average within the same specialty.
Pharmaceutical expenditure also remains under the spotlight. Medicines have consistently been one of GESY’s largest spending categories, with hundreds of millions of euros budgeted in 2024, including substantial sums for new or specialised treatments. The AI system will flag cases involving systematic prescription of branded medicines where generics or alternative therapies are available, without adequate justification. By comparing prescribing behaviour among doctors of the same specialty, the system can highlight deviations that are not clinically explained.
How oversight changes
Until now, GESY controls have relied on sample checks, complaint-driven audits and retrospective analysis of claims, often after payments have already been made.
The introduction of artificial intelligence does not abolish this framework. Instead, it adds a further layer of supervision based on large-scale data analysis. Rather than examining individual acts in isolation, the system analyses behavioural patterns. It compares frequencies of services, sequences of care and practices across comparable specialties, seeking deviations that lack medical or operational justification.
In practical terms, when such a pattern is detected, the system generates an alert that is forwarded to human auditors for assessment. Artificial intelligence does not make decisions or impose penalties. It functions as a support tool, identifying and prioritising cases that warrant closer scrutiny.
Implications for healthcare providers
For healthcare providers, AI-enhanced oversight means faster activation of sanctions when suspicious practices are identified. The penalties framework itself does not change, but enforcement becomes more immediate and more targeted, grounded in data and behavioural patterns revealed through analysis.
Under the HIO’s existing regulatory framework, sanctions are applied on a graduated basis. They include the immediate suspension of payments for suspect claims pending investigation, recovery of funds through offsets when unjustified or fraudulent payments are proven, and permanent exclusion from GESY with referral to the justice system in serious cases of fraud or repeated abuse.
These measures are already in force. In the six years since GESY began operating, more than 500,000 claim checks have been carried out, with tens of thousands of cases leading to corrections or offsets. Fines have been imposed on over 100 providers, and contracts have been terminated, with doctors removed from the system due to abusive practices. The deployment of artificial intelligence is intended to make this enforcement framework sharper, faster and more systematic.