# Medical Hallucinations in Foundation Models and Their Impact on Healthcare

arXiv: https://arxiv.org/abs/2503.05777 · HTML: https://mlsanity.com/paper/2503.05777/

## Key facts

- Cited by 93 papers in the map (data through 14 Oct 2026).
- Placed in Hallucination detection and mitigation, one of 17 directions in LLM reasoning.
- First posted on arXiv 26 Feb 2025.

## Placed in

- LLM reasoning / [Hallucination detection and mitigation](https://mlsanity.com/lr/hallucination-detection-and-mitigation/)

## Built on by (most cited first, 30 of 93)

- [Large Language Models Hallucination: A Comprehensive Survey](https://mlsanity.com/paper/2510.06265/) (2025)
- [MedBrowseComp: Benchmarking Medical Deep Research and Computer Use](https://mlsanity.com/paper/2505.14963/) (2025)
- [A Survey on Autonomy-Induced Security Risks in Large Model-Based Agents](https://mlsanity.com/paper/2506.23844/) (2025)
- [Baichuan-M3: Modeling Clinical Inquiry for Reliable Medical Decision-Making](https://mlsanity.com/paper/2602.06570/) (2026)
- [Learned Hallucination Detection in Black-Box LLMs using Token-level Entropy Production Rate](https://mlsanity.com/paper/2509.04492/) (2025)
- [Knowledge Graphs are Implicit Reward Models: Path-Derived Signals Enable Compositional Reasoning](https://mlsanity.com/paper/2601.15160/) (2026)
- [Rethinking Retrieval-Augmented Generation for Medicine: A Large-Scale, Systematic Expert Evaluation and Practical Insights](https://mlsanity.com/paper/2511.06738/) (2025)
- [A Survey of Foundation Models for IoT: Taxonomy and Criteria-Based Analysis](https://mlsanity.com/paper/2506.12263/) (2025)
- [Memorization in Large Language Models in Medicine: Prevalence, Characteristics, and Implications](https://mlsanity.com/paper/2509.08604/) (2025)
- [MARCH: Multi-Agent Reinforced Self-Check for LLM Hallucination](https://mlsanity.com/paper/2603.24579/) (2026)
- [Self-Improvement of Large Language Models: A Technical Overview and Future Outlook](https://mlsanity.com/paper/2603.25681/) (2026)
- [Stabilizing Reasoning in Medical LLMs with Continued Pretraining and Reasoning Preference Optimization](https://mlsanity.com/paper/2504.18080/) (2025)
- [Brittleness and Promise: Knowledge Graph Based Reward Modeling for Diagnostic Reasoning](https://mlsanity.com/paper/2509.18316/) (2025)
- [CCD: Mitigating Hallucinations in Radiology MLLMs via Clinical Contrastive Decoding](https://mlsanity.com/paper/2509.23379/) (2025)
- [Generalization of Fine-Tuned Uncertainty Communication and Metacognition in Large Language Models](https://mlsanity.com/paper/2510.05126/) (2025)
- [BioMedSearch: A Multi-Source Biomedical Retrieval Framework Based on LLMs](https://mlsanity.com/paper/2510.13926/) (2025)
- [Black-Box Behavioral Distillation Breaks Safety Alignment in Medical LLMs](https://mlsanity.com/paper/2512.09403/) (2025)
- [MedCEG: Reinforcing Verifiable Medical Reasoning with Critical Evidence Graph](https://mlsanity.com/paper/2512.13510/) (2025)
- [Evaluating Clinical Competencies of Large Language Models with a General Practice Benchmark](https://mlsanity.com/paper/2503.17599/) (2025)
- [GuessArena: Guess Who I Am? A Self-Adaptive Framework for Evaluating LLMs in Domain-Specific Knowledge and Reasoning](https://mlsanity.com/paper/2505.22661/) (2025)
- [Fine-Tuned LLMs Know They Don't Know: A Parameter-Efficient Approach to Recovering Honesty](https://mlsanity.com/paper/2511.12991/) (2025)
- [WER is Unaware: Assessing How ASR Errors Distort Clinical Understanding in Patient Facing Dialogue](https://mlsanity.com/paper/2511.16544/) (2025)
- [Copy-Paste to Mitigate Large Language Model Hallucinations](https://mlsanity.com/paper/2510.00508/) (2025)
- [DispatchMAS: Fusing taxonomy and artificial intelligence agents for emergency medical services](https://mlsanity.com/paper/2510.21228/) (2025)
- [Mitigating Hallucination in Large Language Models (LLMs): An Application-Oriented Survey on RAG, Reasoning, and Agentic Systems](https://mlsanity.com/paper/2510.24476/) (2025)
- [Foundation Models in Biomedical Imaging: Turning Hype into Reality](https://mlsanity.com/paper/2512.15808/) (2025)
- [Bayesian-LoRA: Probabilistic Low-Rank Adaptation of Large Language Models](https://mlsanity.com/paper/2601.21003/) (2026)
- [CARE-RFT: Confidence-Anchored Reinforcement Finetuning for Reliable Reasoning in Large Language Models](https://mlsanity.com/paper/2602.00085/) (2026)
- [RAG-X: Systematic Diagnosis of Retrieval-Augmented Generation for Medical Question Answering](https://mlsanity.com/paper/2603.03541/) (2026)
- [Computational Pathology in the Era of Emerging Foundation and Agentic AI -- International Expert Perspectives on Clinical Integration and Translational Readiness](https://mlsanity.com/paper/2603.05884/) (2026)

## Abstract (arXiv)

Hallucinations in foundation models arise from autoregressive training objectives that prioritize token-likelihood optimization over epistemic accuracy, fostering overconfidence and poorly calibrated uncertainty. We define medical hallucination as any model-generated output that is factually incorrect, logically inconsistent, or unsupported by authoritative clinical evidence in ways that could alter clinical decisions. We evaluated 11 foundation models (7 general-purpose, 4 medical-specialized) across seven medical hallucination tasks spanning medical reasoning and biomedical information retrieval. General-purpose models achieved significantly higher proportions of hallucination-free responses than medical-specialized models (median: 76.6% vs 51.3%, difference = 25.2%, 95% CI: 18.7-31.3%, Mann-Whitney U = 27.0, p = 0.012, rank-biserial r = -0.64). Top-performing models such as Gemini-2.5 Pro exceeded 97% accuracy when augmented with chain-of-thought prompting (base: 87.6%), while medical-specialized models like MedGemma ranged from 28.6-61.9% despite explicit training on medical corpora. Chain-of-thought reasoning significantly reduced hallucinations in 86.4% of tested comparisons after FDR correction (q < 0.05), demonstrating that explicit reasoning traces enable self-verification and error detection. Physician audits confirmed that 64-72% of residual hallucinations stemmed from causal or temporal reasoning failures rather than knowledge gaps. A global survey of clinicians (n = 70) validated real-world impact: 91.8% had encountered medical hallucinations, and 84.7% considered them capable of causing patient harm. The underperformance of medical-specialized models despite domain training indicates that safety emerges from sophisticated reasoning capabilities and broad knowledge integration developed during large-scale pre-training, not from narrow optimization.