Counterfactual Reasoning in Language Models

Latest papers 19

Oct 1, 2026cs.CL

A rubric landscape for evaluating clinical reasoning in large language models: what exists, what is missing, and what needs to be combined

Exam-style accuracy does not establish whether large language models (LLMs) reason well over clinical records. We define clinical reasoning as integrating and updating evidence across time and sources to form, revise and justify a patient's problem representation and a defensible plan. This structured narrative review maps three literatures: medical education assessment instruments, clinical LLM benchmarks published from 2023 onwards, and general-domain methods for evaluating long-form generation. We examine six dimensions: problem representation, temporal synthesis, differential and management reasoning, counterfactual reasoning, calibrated uncertainty, and reasoning faithfulness. Preprints are included and flagged. No single instrument covers all six dimensions. Problem representation and differential or management reasoning are reasonably covered, although reliability varies by instrument and setting. TIMER-Eval targets temporal synthesis, and ER-Reason assesses sequential diagnostic belief updating. Dedicated uncertainty and counterfactual evaluations are emerging, but their applicability to longitudinal free-text reasoning remains limited. Factual completeness is well theorised in general-domain evaluation, with early clinical evidence of important omissions. Faithfulness remains the weakest dimension, with one identified clinical causal-ablation study on multiple-choice questions. Existing tools should be combined through binary rubric items, separate completeness and correctness scores, case-specific importance weighting with non-compensable safety caps, temporal order-consistency checks, and chance-corrected reliability reporting. Further design work is needed for calibrated uncertainty, counterfactual reasoning and faithfulness over longitudinal free-text records. This review provides a design rationale, not a validated instrument.
Sep 15, 2026cs.CL

An Empirical Study of Counterfactual Self-Explanations in LLMs

Large language models can easily generate explanations for their own outputs, but such self-explanations are not necessarily faithful to the model's behavior. We study this issue through counterfactual self-explanations, where a model minimally edits an input so that its own prediction changes. Across sentiment analysis and natural language inference, we evaluate ten instruction-tuned models from the LLaMA-3 and Qwen-2.5 families, measuring faithfulness, minimality, and alignment with human-annotated rationales. Our results show that model scale is the strongest determinant of explanation quality: larger models are substantially more likely to generate counterfactuals that flip their own predictions and target decision-relevant evidence. In contrast, the rationale-guided condition produces edit-minimal counterfactuals that are also more human-aligned. However, it does not consistently improve faithfulness. Overall, counterfactual self-explanations can provide useful behavioral evidence about model decisions, but their reliability depends strongly on model capacity and should be empirically validated rather than assumed.
Sep 7, 2026cs.LG

InfluenceField: A Differentiable Field with Interventionally Identifiable Causal Structure for Multimodal World Modeling

Multimodal large language models often capture visual-linguistic correlations but struggle to predict how local visual interventions propagate and affect downstream answers. We introduce InfluenceField, an intervention-aware latent field inserted between the visual encoder and language decoder. It lifts patch features into a continuous spatial representation, propagates directed influence over multiple steps, and predicts local intervention effects through a shared transition operator. Training jointly optimizes language modeling, cross-environment invariance, counterfactual rollout supervision, and structural regularization. For a nonlinear finite-basis population model, we show that target-aligned interventional supervision, together with a one-step separation condition on the transition, restricts admissible representations to within-location reparameterizations, so that the directed dependency graph of the full transition is recovered exactly. A linear specialization gives an exact partial-coverage characterization and a finite-loss stability bound, and the field analysis derives the spatial profile of coefficient interventions together with a shared-channel calibration result. On CausalVQA, InfluenceField improves overall accuracy over its backbone by 13.1 percentage points, with the largest gains on the planning and hypothetical categories. Capacity-matched baselines and structural controls attribute the gains in robustness and factual-counterfactual consistency to the causal objectives rather than to added capacity.
Aug 9, 2026cs.IR

What Would Fix This RAG Failure? Auditing Counterfactual Response with Paired Evidence Interventions

A failed retrieval-augmented generation (RAG) answer can be consistent with several unseen responses to evidence repair. We introduce Pair-ID, an offline audit that holds one query, retrieval state, and reader constant, then crosses two operations, adding missing support and deleting verified nonsupport, to measure a same-failure counterfactual response vector. A complete funnel over 19,981 benchmark queries identifies 11,105 eligible Qwen failures, from which a prospectively fixed SHA-256 ordering selects 1,200 before generating any sampled response. Among 1,190 regenerated-valid failures, support addition repairs 197/600 JOINT cases (0.328, 95% CI [0.292, 0.367]), and deletion repairs 162/1,190 cases (0.136, 95% CI [0.117, 0.155]); length- and position-matched shams retain semantic contrasts of 0.223 and 0.101. The original view carries partial predictive signal for individual response cells (macro AUROC 0.678; Brier 0.152 versus 0.160 for a marginal baseline), but exact-vector accuracy, 0.637, does not exceed the 0.646 majority-vector baseline, and vector macro-F1 is 0.170. Across four readers, both marginal sensitivities recur, while pooled exact-vector agreement is 0.675-0.765 and JOINT-only agreement falls to 0.538-0.691. These results show that evidence sensitivity occurs at meaningful rates in the hash-selected eligible-failure sample, is only partially predictable from the observed failure, and is conditional on the reader. The evidence supports a frame-scoped offline response audit, not an information-theoretic impossibility result, reader-independent taxonomy, or runtime repair policy.
Aug 8, 2026cs.AI

Counterfactual Benchmarking and Training for Factuality Consistency and Order-Robust Grounded Reasoning in LLMs over Heterogeneous Knowledge

Large language models (LLMs) have increasingly supported response generation grounded in user-provided knowledge spanning heterogeneous structures. However, existing benchmarks provide limited assessment of whether LLMs can faithfully perform multi-hop reasoning chains across such knowledge contexts while remaining robust to variations in their input order. We introduce TKFQA, a factuality consistency benchmark comprising 10,130 question-answering (QA) pairs grounded in tables, texts, and knowledge graphs (KGs). Each example is constructed from an explicit counterfactual reasoning chain, enabling the joint evaluation of answer correctness, reasoning-chain accuracy, and robustness to different input-order. An extensive evaluation of 14 open- and closed-source LLMs reveals that state-of-the-art models exhibit limited reasoning-chain accuracy and remain sensitive to variations in the input order of heterogeneous knowledge contexts. To address these limitations, we propose ORLF, an LLM-agnostic training framework that models cross-context topological relations through knowledge-specific latent vectors. ORLF integrates context-wise position encoding, a latent-bridge attention mask, and topological knowledge bias to preserve knowledge-specific bias and encode topological semantics. Experiments across four LLM backbones show that ORLF outperforms competitive training-free and LoRA-based baselines, improving average Exact Match and Reasoning-Chain Accuracy by 2.15% and 4.29%, respectively, while reducing order-induced performance standard deviation by 0.04% to 3.01%.
Aug 5, 2026cs.AI

Counterfactual Analysis via Large Language Models

Counterfactual analysis aims to predict potential outcomes under hypothetical scenarios, offering valuable insights for decision-making. This paper investigates the application of large language models (LLMs), specifically the GPT-3.5 model, for counterfactual analysis. We focus on the online lending context, where the counterfactual return on investment (ROI) is crucial for evaluating different interest rate schemes. We begin by assessing the predictive performance of GPT and comparing it with advanced machine learning algorithms. The results show that prompt engineering can significantly enhance GPT's predictions, with the R-squared increasing from 1.97% to 2.84%, closely approaching the 3.48% achieved by gradient-boosted regression. Subsequently, we utilize GPT to generate counterfactual ROIs under a set of alternative interest rates. GPT exhibits logical coherence and causal reasoning in its responses. The findings underscore the potential of LLMs as effective tools for counterfactual analysis in online lending, suggesting broader applications for LLMs in various predictive and decision-making contexts.
Jul 19, 2026cs.AI

An Explicit World Model Based on Data-First Ontology: DaoQL Multimodal Storage Validation and Counterfactual Reasoning Evaluation

Large language models encode world models implicitly in neural weights, which exposes four structural risks in high-precision domains such as medicine and finance: hallucination, frozen knowledge, poor explainability, and poor modifiability. This paper proposes data-first ontology: LLMs are treated as reasoning and language engines, while deterministic knowledge is moved into an explicit multimodal database, DaoQL. We formalize an explicit world model and show that, under rule independence, deterministic evaluation, and fixed conflict resolution, explicit models provide a sufficient condition for composable counterfactual decomposability; implicit models lack atomic read/delta semantics and therefore provide no comparable architectural guarantee. The implemented system focuses on DaoQL's verified storage layer and explicit Eval path, integrating graph, column, vector, and full-text engines within one process. KVCache graph nodes, expert hot updates, and the DaoQL-Agent runtime remain future work. On an embedded same-machine setup, DaoQL reports graph BFS at 1.20 ms, HNSW at 83.1 us, and a Fluent hybrid query at 105.8 us; these results indicate engineering potential but must be interpreted with deployment-shape differences from client-server systems. Exploratory measurements on LDBC SNB SF1 and ANN-Benchmarks further show 34/34 query coverage with interactive-class queries mostly in the sub-millisecond to millisecond range, but only 1.8 QPS overall due to long-tail BI/IC queries; ANN-Benchmarks reaches Recall@10 >= 99% at thousand-level QPS after a bridge-edge protection fix. In a five-domain counterfactual experiment (n = 1250), DaoQL+GPT-4o achieves 94% composable counterfactual decomposability, 49 percentage points above GPT-4o alone. The paper explicitly separates provable structure, preliminary empirical evidence, and architectural roadmap claims.
Jul 12, 2026cs.AI

CRiT-QA: Evaluating Multi-hop Reasoning with Counterfactual Chains and Distractor Traps

Evaluating the multi-hop reasoning capabilities of large language models remains a significant challenge. Although current models achieve strong results on existing multi-hop question answering datasets, such performance often masks two critical vulnerabilities: (1) reliance on internal parametric knowledge rather than adherence to the provided context, and (2) exploitation of dataset shortcuts, such as single-document cues or type-matching, that diminish the need for genuine evidence aggregation across multiple documents. We introduce CRiT-QA (Counterfactual Reasoning with Traps), a dataset explicitly designed to address both limitations. To neutralize reliance on memorized knowledge and enforce strict context dependency, CRiT-QA transforms factual reasoning chains with counterfactual entities. Furthermore, it injects multi-anchor distractor chains, plausible but incorrect reasoning paths that diverge at different hops. These traps require models to follow the entire reasoning process rather than exploiting shallow heuristics. Our experiments show that LLMs exhibit substantial performance degradation on CRiT-QA compared to standard datasets, exposing their vulnerability to counterfactual conditions and distractor traps. CRiT-QA thus serves as a rigorous diagnostic tool for evaluating genuine multi-hop reasoning and provides a foundation for developing more reliable, evidence-grounded LLMs.
Jul 4, 2026cs.CL

NormWorlds-CF: Solver-Verified Counterfactual Normative Reasoning with Metamorphic-Relation GRPO

Language models can reach the right normative verdict for the wrong reason. We introduce NormWorlds-CF, a solver-verified environment for counterfactual normative reasoning in executable rule worlds. Its deterministic solver produces final answers, proof and falsification certificates, argument statuses, support sets, and paired-world change labels, enabling supervision and evaluation without LLM judges. The benchmark contains staged SFT diagnostics and a compact paired-world task with 270 root families and 1080 canonical-to-variant pairs. The SFT diagnostics show that final-answer supervision is an unsafe proxy: answer-only SFT reaches perfect accuracy on answer tasks but scores zero on falsification, while proof-plus-falsification training with targeted replay reaches strong all-task accuracy. For the structured-change task, we introduce metamorphic-relation GRPO (MR-GRPO), a class-conditioned reward for GRPO that gives partial credit for relation families and solver-visible change fields. In matched 1.7B continuation experiments, MR-GRPO improves held-out relation accuracy and relation-family correctness, and reduces wrong-family error, compared to sparse and answer-only GRPO. In Qwen3-4B three-seed validation, answer-only reward improves answer-change fields but weakens relation-family structure, sparse reward preserves coarse relation labels best, and MR-GRPO delivers the strongest balanced performance across answer-change, support-change, status-change, and soft root-level metamorphic-relation metrics. These results show that verified counterfactual structure can shape post-training beyond final answers, while exact full change-record generation, invariant subtype recognition, and out-of-distribution (OOD) transfer remain open problems.
Jun 30, 2026cs.LG

Testing Frontier Large Language Models' Physics Literacy in Parallel Physical Worlds

Current large-language-model (LLM) physics benchmarks are usually scored by answer accuracy, which cannot distinguish genuine reasoning from recall of familiar problem patterns and reveals little about where a model's reasoning breaks down. We introduce an auditable four-stage diagnostic that evaluates whether an LLM can reason inside an unfamiliar physics framework through induction, formulation, prediction, and review. The diagnostic combines locked pre-registrations, fresh sessions between stages, dual-LLM judging, and a human-audit pathway, and we apply it to three parallel physics worlds: a single-equation counterfactual world (F=mvF=mv), a historical framework (Aristotelian mechanics), and a four-domain counterfactual world (Decay World). Across Claude Opus 4.7, GPT-5.5, and Gemini 3.1 Pro, the three worlds yield composite PASS rates are 6/15, 6/15, and 0/15 respectively (content ∧\land structural for F=mvF=mv and Aristotelian, content axis only for Decay World where the structural axis is out of scope). The most pointed empirical pattern is a qualitative-versus-quantitative asymmetry: in Decay World, models almost never predict the wrong direction of change, but frequently compute the wrong ratio by slipping back to standard-physics relations. The protocol also surfaces two methodology findings: LLM-judge reliability does not transfer across frameworks, and Stage 4 self-review is weak in every framework, with the model's own review wrongly reporting no earlier error in at least two-thirds of the trials that actually contained one. We release the full prompts, responses, verdicts, and audit records.
Jun 17, 2026cs.CL

PragReST: Self-Reinforcing Counterfactual Reasoning for Pragmatic Language Understanding

Natural language understanding often depends on meanings that are implied rather than explicitly stated, requiring pragmatic reasoning. Despite strong performance on math and logical reasoning, large language models (LLMs) still struggle with making pragmatic inferences, often choosing literal interpretations. To improve LLM pragmatic reasoning, we introduce PragReST, a self-supervised framework that constructs pragmatic QA data, generates counterfactual reasoning traces, and trains models to internalize them through supervised fine-tuning and reinforcement learning, without human-labeled training data or distillation from a stronger teacher. Across four pragmatic benchmarks (PragMega, Ludwig, MetoQA, and AltPrag), PragReST improves over backbone models, task-specific pragmatic tuning baselines, and non-counterfactual variants of the same pipeline. On accuracy-based benchmarks, PragReST improves over the instruct backbone by 5.37 and 5.50% (absolute) for Qwen3-8B and Qwen3-14B, respectively. Our error analysis and ablations underscore the importance of counterfactual reasoning: PragReST primarily reduces errors caused by failures to contrast observed utterances with plausible alternatives, and removing counterfactual reasoning substantially reduces performance. Moreover, our training preserves out-of-domain performance on general-knowledge and mathematical reasoning benchmarks.
Jun 14, 2026cs.LG

Re-feeding Is Not Replaying: Measuring Replay Noise in Counterfactual Token-Credit Estimation

Per-token counterfactual credit estimation asks which token in a language-model rollout caused the final answer to be right or wrong: cut the transcript at a pivot, substitute an alternative token, replay continuations, and compare outcomes. Published methods re-feed the transcript prefix as a fresh prompt, assuming this reproduces the state the model passed through during generation. We measure what that assumption costs on a stock inference engine, with a three-pass design: continuations resumed from the verified decode-time KV state, an identical second exact pass (a replica noise floor), and a re-feed pass. Across six configurations and three models (including a GRPO-trained checkpoint), at low-margin decision tokens, re-feeding changes the credit estimate at rates 14-28 percentage points above the replica floor (7-21pp under a treatment-independent conditioning; problem-clustered t = 2.9-6.4). Most changes are zero-boundary crossings of the quantized estimator rather than polarity reversals, and the perturbation is consistent with mean-zero, so averaged quantities are largely safe; but selection is not: a critical-token set chosen by thresholding ∣A^t∣|\hat{A}_t| under re-feed overlaps the exact-resume selection at Jaccard 0.34-0.90, versus a 0.63-0.96 replica ceiling. A causal confirmation closes the loop: under vLLM's batch-invariant kernels all three passes are identical on every measured channel, with both disagreement rates exactly zero. Replica passes themselves disagree on 9-23% of eligible estimates: single-sample credit measurements at decision tokens are unreliable under any replay. Settings were fixed in advance; exact-pass cache hits in the second campaign are instrumented (100% hit rate, 3,434 pivots); total compute was under 10 USD. We recommend that counterfactual credit studies resume decoder state or use batch-invariant kernels, and report a replica floor.
May 28, 2026cs.CV

DMC-CF: Dynamic Multimodal CounterFactual QA benchmark for Causal Reasoning

With the rapid advancement of multimodal large language models (MLLMs), models have demonstrated increasingly powerful multimodal capabilities. However, whether MLLMs trained through statistical learning can truly understand the causal relationships underlying the real world remains a key research question. In recent years, numerous multimodal causal reasoning datasets have been proposed. Nevertheless, these datasets are either limited in scale or constructed from synthetic images and videos, cartoon-based content, or other non-realistic multimodal sources. To address these limitations, we collect real-world videos and construct DMC-CF-Static, a large-scale benchmark for multimodal causal counterfactual reasoning. Furthermore, to mitigate issues such as data contamination in traditional static evaluation, we represent causal events using causal graphs and propose the Dynamic Graph Intervention (DGI) framework to build the dynamic evaluation benchmark DMC-CF-Dynamic from DMC-CF-Static. Experimental results on the overall DMC-CF, which includes both static and dynamic evaluation benchmarks, demonstrate that the multimodal causal reasoning capabilities of current multimodal large language models in real-world scenarios still require substantial improvement.
May 16, 2026cs.CL

The Point of No Return: Counterfactual Localization of Deceptive Commitment in Language-Model Reasoning

Existing deception datasets label completed outputs as honest or deceptive, treating deception as a property of the final response rather than a function of the model's reasoning trace. This obscures a more fundamental question: when does a language model become committed to deception? We introduce counterfactual localization: for each sentence prefix in a reasoning trace, we fix the prefix, resample continuations, and estimate the probability of a deceptive outcome. To scale this, we construct five environments (spanning strategic bluffing, maze guidance, financial advice, used-car sales, and offer negotiation) in which deception is never prompted but emerges from strategic incentives and labels follow mechanically from environment state rather than subjective human judgment. The resulting corpus localizes ∼\sim1.46M sentences across four reasoning models, drawn from over 94.1M sampled continuations, 91.5B generated tokens, and over 100K scenarios. Sentence-level human evaluation confirms that detected commitment points correspond to interpretable shifts in decision state. Using this resource, we show that lexical cues for commitment prediction transfer poorly across environments, whereas attention-based transition features generalize out of distribution, suggesting that deceptive commitment is reflected in reusable changes in reasoning dynamics rather than surface form. We further identify compact attention-head sets (under 10% of heads) that, selected on one environment, causally suppress deceptive commitment across held-out environments. We release the corpus as a substrate for studying deception, and more broadly commitment, in language-model reasoning.
May 13, 2026cs.AI

Conditional Attribute Estimation with Autoregressive Sequence Models

Generative models are often trained with a next-token prediction objective, yet many downstream applications require the ability to estimate or control sequence-level properties. Next-token prediction can lead to overfitting of local patterns during training, underfitting of global structure, and requires significant downstream modifications or expensive sampling to guide or predict the global attributes of generated samples at inference time. Here, we introduce Conditional Attribute Transformers, a novel method for jointly estimating the next-token probability and the value of an attribute conditional on each potential next token selection. This framework enables three critical capabilities within a single forward pass, without modification of the input sequence: (1) per-token credit assignment across an entire sequence, by identifying how each token in a sequence is associated with an attribute's value; (2) counterfactual analysis, by quantifying attribute differences conditional on alternative next token choices; (3) steerable generation, by decoding sequences based on a combination of next-token and attribute likelihoods. Our approach achieves state of the art performance on sparse reward tasks, improves next-token prediction at sufficient model sizes, estimates attribute probabilities orders of magnitude faster than sampling, and can guide decoding of autoregressive sequence models on a range of language tasks.
May 12, 2026cs.CL

Macro: Enhancing Multilingual Counterfactual Explanations through Alignment-as-Preference Optimization

Self-generated counterfactual explanations (SCEs) are minimally modified inputs (minimality) generated by large language models (LLMs) that flip their own predictions (validity), offering a causally grounded approach to unraveling black-box LLM behavior. Yet extending them beyond English remains challenging: existing methods struggle to produce valid SCEs in non-dominant languages, and a persistent trade-off between validity and minimality undermines explanation quality. We introduce Macro, a preference alignment framework that applies Direct Preference Optimization (DPO) to multilingual SCE generation, using a composite scoring function to construct preference pairs that effectively translate the trade-off into measurable preference signals. Experiments across four LLMs and seven typologically diverse languages show that Macro improves validity by 12.55% on average over the chain-of-thought baseline without degrading minimality, while avoiding the severe minimality violations of the translation-based baseline. Compared to supervised fine-tuning, Macro achieves superior performance on both metrics, confirming that explicit preference optimization is essential for balancing this trade-off. Further analyses reveal that Macro increases cross-lingual perturbation alignment and mitigates common generation errors. Our results highlight preference optimization as a promising direction for enhancing multilingual model explanations.
Apr 24, 2026cs.CL

DeepImagine: Learning Biomedical Reasoning via Successive Counterfactual Imagining

Predicting the outcomes of prospective clinical trials remains a major challenge for large language models. Prior work has shown that both traditional correlational predictors, such as random forests and logistic regression, and strong commercial LLMs achieve limited performance on this task. In this paper, we propose DeepImagine, a framework for teaching LLMs biomedical reasoning through successive counterfactual imagining. The central idea is to approximate hidden causal mechanisms of clinical trials by training models to infer how observed trial results would change under controlled perturbations of experimental conditions, such as dosage, outcome measures, study arms, geography, and other trial attributes. To support this objective, we construct both natural and approximate counterfactual pairs from real clinical trials with reported outcomes. For settings where strict counterfactual supervision is available, such as paired outcome measures or dose-ranging study arms within the same trial, we train models with supervised fine-tuning. For broader settings where only approximate counterfactual pairs can be retrieved, we optimize models with reinforcement learning using verifiable rewards based on downstream benchmark correctness. We further augment training with synthetic reasoning traces that provide causally plausible explanations for local counterfactual transitions. Using this pipeline, we train language models under 10B parameters, including Qwen3.5-9B, and evaluate them on clinical trial outcome prediction. We aim to show that DeepImagine consistently improves over untuned language models and traditional correlational baselines. Finally, we aim to show that the learned reasoning trajectories provide interpretable signals about how models represent trial-level mechanisms, suggesting a practical path toward more mechanistic and scientifically useful biomedical language models.
Apr 24, 2026cs.CL

Exposing the Unsaid: Visualizing Hidden LLM Bias through Stochastic Path Aggregation

Large Language Models (LLMs) exhibit representational and syntactic biases that are difficult to evaluate due to the stochastic nature of text generation. Standard auditing methods rely on a single output inspection or static automated metrics. These approaches obscure the underlying probability distributions and fail to capture biases hidden in lower-probability generation branches. This paper introduces TreeTracer, a visual analytics tool designed to evaluate LLM bias through aggregated comparison. Using a systematic perturbation analysis pipeline, the tool replaces ontology-defined terms in each input prompt, aggregates hundreds of stochastic generations into a syntax-aligned hierarchical structure, and then performs classification-aware node merging with an auxiliary language model. The resulting structure is visualized through a custom Sankey diagram. By juxtaposing two ontology-driven trees, the workspace enables direct comparison between semantic contexts and supports systematic bias detection. Because any visualization reflects only a subset of the model's learned behavior, the system further applies contrastive inference to compute and directly display counterfactual token probabilities across contexts, reducing the risk of misinterpreting the presence of bias. We validate the workspace through case studies comparing an unaligned baseline model GPT-2 XL against the constitutionally aligned Apertus models. The visual aggregation successfully exposes hidden representational harms, such as counterfactual pronoun suppression and conversational marginalization of individuals. A preliminary user study confirms that the aggregated comparative interface reduces cognitive load and effectively supports analysts in detecting systemic biases.
Jan 21, 2026cs.LG

Counterfactual Modeling with Fine-Tuned LLMs for Health Intervention Design and Sensor Data Augmentation

Counterfactual explanations (CFEs) provide human-centric interpretability by identifying the minimal, actionable changes required to alter a machine learning model's prediction. Therefore, CFs can be used as (i) interventions for abnormality prevention and (ii) augmented data for training robust models. We conduct a comprehensive evaluation of CF generation using large language models (LLMs), including GPT-4 (zero-shot and few-shot) and two open-source models-BioMistral-7B and LLaMA-3.1-8B, in both pretrained and fine-tuned configurations. Using the multimodal AI-READI clinical dataset, we assess CFs across three dimensions: intervention quality, feature diversity, and augmentation effectiveness. Fine-tuned LLMs, particularly LLaMA-3.1-8B, produce CFs with high plausibility (up to 99%), strong validity (up to 0.99), and realistic, behaviorally modifiable feature adjustments. When used for data augmentation under controlled label-scarcity settings, LLM-generated CFs substantially restore classifier performance, yielding an average 20% F1 recovery across three scarcity scenarios. Compared with optimization-based baselines such as DiCE, CFNOW, and NICE, LLMs offer a flexible, model-agnostic approach that generates more clinically actionable and semantically coherent counterfactuals. Overall, this work demonstrates the promise of LLM-driven counterfactuals for both interpretable intervention design and data-efficient model training in sensor-based digital health. Impact: SenseCF fine-tunes an LLM to generate valid, representative counterfactual explanations and supplement minority class in an imbalanced dataset for improving model training and boosting model robustness and predictive performance