Addressing Improper Use of AI in Claim Denials

Artificial Intelligence (AI) technology has become increasingly ubiquitous and stands poised to fundamentally transform the delivery of healthcare.  Although AI technology can be utilized by health systems to improve efficiencies and patient experience, it also can be used by payers to improperly expedite claims processing, undercut physician judgment, and circumvent established coverage criteria.  Healthcare Legal Solutions is committed to working with hospitals to fight improper claim denials based on unscrupulous claims processing techniques. 

Healthcare Legal Solutions is an innovative collections law firm that maximizes third party recoveries for health systems and institutional healthcare providers.  Healthcare Legal Solutions appeals and resolves delayed, denied, and underpaid claims from payers, including Medicare Advantage (MA) plans.  Improper claim denials are a tremendous burden on the United States healthcare system, with hospitals across the United States losing approximately $262 billion every year due to denied claims, many of which are improper.  Notably, the Department of Health and Human Services’ Office of Inspector General has found “widespread and persistent problems related to denials of care and payment in Medicare Advantage” and that, among prior authorization requests denied by MA plans, only 13% met Medicare coverage rules.  In other words, MA plans are inappropriately denying claims for services that would have been approved for these beneficiaries under traditional, fee-for-service Medicare.

Without appropriate regulation, AI has only exacerbated these problems.  For example, a recently filed class action lawsuit alleges that UnitedHealth Group’s AI algorithm, nH Predict, systematically denies elderly patients’ claims for extended care, such as nursing facility stays.  The plaintiffs, who are seeking to represent a nationwide class of people on MA plans, allege more than 90% of patient claim denials from nH Predict were overturned following appeal.

Recognizing the need for greater regulation over the use of AI in claims processing, a group of members of the U.S. House of Representatives sent a letter to the Centers for Medicare and Medicaid Services (CMS) requesting that the federal agency increase its oversight of AI use in MA plans’ prior authorization processes.  This letter was provided shortly after an Executive Order was published calling for the safe, secure, and trustworthy development and use of AI in healthcare.

Healthcare Legal Solutions urges CMS to implement more stringent regulatory measures to ensure that MA plans and other payers do not improperly rely on AI technology to avoid paying claims for medically necessary care.  Absent such regulation, MA plans’ reliance on AI will continue to lead to unlawful denials and fact-ignorant coverage decisions.  Healthcare Legal Solutions will continue to work diligently with hospitals to hold payers accountable to ensure that hospitals receive the reimbursement they deserve.

If you have any questions regarding our approach to addressing improper claim denials based on the use of AI, please contact Desiree Charpentier at DCharpentier@hlsllc.com.

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