How can payers ensure ethical AI use when making coverage decisions?
Healthcare payers are turning to artificial intelligence (AI) to enhance accuracy and ensure fairness in medical claims processing.
Here's why it's becoming essential: A 2023 report by the National Bureau of Economic Research (NBER) suggests that a broader AI application could save the US healthcare industry approximately $200-$360 billion annually.
However, despite the bright outlook, payers are bound by new AI guidance per the:
- 2024 Medicare Advantage and Part D Final Rule.
- Centers for Medicare & Medicaid Services (CMS) internal benefits requirements.
- Affordable Care Act’s (ACA's) nondiscrimination rules.
Given the stakes, healthcare payers must navigate compliance with precision to prevent costly litigation and the risk of unjust claim denials.
So, how can payers leverage AI to enhance efficiency and reduce errors in medical claims while adhering to stringent regulatory standards? This article will explore how payers can implement AI ethically in medical claims processing, ensuring compliance and driving innovation within the constraints of current regulations.
Key Takeaways
- AI's integration in healthcare claims processing offers considerable financial benefits: Its broader application could save the US healthcare industry billions yearly, and the predictive analytics market is projected to expand significantly.
- Ethical challenges exist in applying AI to insurance coverage decisions: Instances where AI overruled physicians have led to legal issues. Payers must balance AI assistance with responsible decision-making to avoid litigation and protect patient health.
- Payers must balance compliance with regulations and ethics while leveraging AI in claims processing. CMS stresses responsible AI use, and upcoming audits will scrutinize adherence to new rules, making it vital for payers to grasp the intricacies of Medicare Advantage and similar healthcare programs.
What’s Behind the Recent Guidance?
CMS recently issued AI guidance for Medicare Advantage plans because there have been concerns about how AI-powered tools influence coverage decisions.
In this environment, healthcare professionals must review AI’s outputs to ensure that medical necessity determinations are made responsibly and avoid exclusive reliance on AI decision-making.
In this area of automating healthcare coverage decisions, there are a few cautionary examples of misusing automated tools to make healthcare coverage decisions.
When AI Overrides Physicians’ Decisions
The year 2023 saw heightened inspection of insurance companies' use of AI. Legal actions against UnitedHealthcare (UHC), Humana, and Cigna allege they unjustly used advanced technological tools and mathematical models to refuse service to Medicare Advantage enrollees.
Lawsuits Over Unjust Denials
UnitedHealthcare and Humana are grappling with class action lawsuits over misusing AI tools to unjustly deny care and reject claims from Medicare Advantage patients.
The UHC lawsuit, initiated by relatives of two deceased program members, claims that coverage for crucial post-acute care was unfairly limited using an algorithm and an AI-driven mechanism, nH Predict, to determine patient care duration, which is said to have overridden physicians' decisions.
Similarly, Humana rejected Medicare Advantage members' claims via an AI tool owned by UnitedHealth Group, alleging that this often overrode medical decisions for patient well-being. To make matters worse, staff faced disciplinary action for deviating from these predictions.
These cases are part of a broader legal movement against insurance giants like UHC and Cigna, alleging misuse of automated data tools resulting in improper claim denials.
Coverage Decisions Cannot Rely Solely on AI.
Payers must navigate the intersection of AI and healthcare with a keen eye on ethical use and regulatory compliance. As CMS guidance suggests, while AI can assist in suggesting health tests and predicting hospital stays, coverage decisions must still consider individual patient information and cannot rely solely on AI.
CMS Audits
Upcoming CMS audits will ensure that healthcare organizations adhere to new regulations regarding AI’s role in healthcare utilization management. Healthcare payers must be ready to demonstrate their responsible use of AI and other advanced technologies to scale their operations.
Guidance for Responsible AI Use in Healthcare
Healthcare professionals are tasked with reviewing AI’s outputs to ensure that medical necessity determinations are made responsibly and avoid exclusive reliance on AI decision-making. Some guidance is already in place to help achieve responsible AI use.
National Frameworks and Initiatives Provide Some Guidance
National frameworks and initiatives, such as the National Institute of Standards and Technology’s (NIST) AI Risk Management Framework and the White House’s Blueprint for an AI Bill of Rights, provide guidance for responsible AI development and application in healthcare environments.
These frameworks are designed to ensure that AI applications in healthcare do not perpetuate discrimination, safeguarding against any form of patient group bias.
Meeting Health Insurers' Standards
AI systems must meet health insurance companies’ standards to ensure claims are processed correctly and efficiently. With Medicare Advantage plans imposing strict documentation and coding rules, AI technologies used in claims processing must be up to the task.
By aligning AI systems with insurers’ policies, healthcare organizations can minimize claim denials and optimize the claims workflow, leading to an improved claims management process.
It’s not just about adhering to standards; it’s about creating a system where the workflow is seamless, and both healthcare providers and insurers can rely on the integrity of the claims process.
This harmonious relationship between AI and health insurers’ standards is necessary to achieve overall efficiency in healthcare claims processing. So, how can it be achieved?
Being Compliant & Efficient is Simple with the Right AI Partner
Despite the many ways AI implementations can go wrong in a healthcare setting, they can also go absolutely right.
Healthcare payers have leveraged AI-powered solutions to issue intelligent, highly accurate payments, such as resolving charges for non-rendered services and correcting bills for duplicate and crossover services that are not separately billable—reducing claims by tens of thousands of dollars.
Examples like the ones mentioned above exemplify how AI can enhance claims management while delivering significant economic benefits. They prove that with the right technology partner, integrating AI in healthcare claims is not just a strategic move but a financially sound one.
Navigating the AI Revolution in Healthcare Claims
Alaffia Health understands the anxiety that regulatory requirements can inflict upon healthcare payer organizations.
With deep knowledge of Medicare Advantage and other programs, we help payers harness AI to streamline operations, ensure data accuracy, and review claims meticulously while maintaining their compliance posture.
Join the AI Revolution Responsibly—with Alaffia Health
Ready to lead in healthcare's AI transformation?
Alaffia Health can help you upgrade your technology responsibly, catalyze a new era of health innovation for your organization, and bring about unprecedented efficiency in your claims management operations.
Leap into the future with an AI-driven solution that puts you in a health-AI partnership with providers—increasing your capacity to review claims precisely and quickly while avoiding costly litigation and compliance issues. Click here to request a free claims audit if you qualify!