AI’s Impact on Health Insurance Claim Denials: What You Need to Know
On December 4, 2024, Brian Thompson, CEO of medical insurance giant UnitedHealthcare, was shot dead in New York, sparking online discourse about the resentment towards health insurance companies. These companies act as gatekeepers in an already flawed healthcare system. Ethnic Media Services shed light on the increasing use of AI algorithms to review insurance claims, sidelining medical professionals in decision-making processes. This practice can lead to detrimental outcomes for policyholders and intensify healthcare disparities. The panel of experts discussed the wider context of AI use in insurance companies, its effects on society, and a new California law aimed at regulating this practice.
Industry Fraught with Mistrust
Katherine Hempstead, from the Robert Wood Johnson Foundation, highlighted the long-standing mistrust between insurers and policyholders. She emphasized the complexity of insurance legalese, disparities in coverage, administrative barriers, and a rise in claim denials. Dr. Miranda Yaber, from the University of Pittsburgh, noted the escalating costs of healthcare, the influx of new treatments not covered by insurers, and the issue of overprescription leading to unwarranted denials.
AI and Its Ripple Effects
Insurance companies resort to AI systems to cut costs, resulting in wrongful claim denials. Lawsuits against United Healthcare and Cigna revealed that 90% of denials were overturned upon appeal, indicating flawed decisions by algorithms lacking comprehensive information. Denials disproportionately affect lower-income and lower-educated communities, worsening healthcare inequalities. Professor Yaver’s research exposed the challenges faced by marginalized groups in navigating complex healthcare systems.
Physicians Make Decisions
California’s Physicians Make Decisions Act, signed into law by Governor Gavin Newsom, mandates human oversight in insurance claim decisions, prioritizing patient well-being over automated processes. The bill aims to curb the detrimental impact of AI-driven denials and ensure fairer outcomes for policyholders. Senator Becker stressed the importance of restoring trust in physicians and highlighted the need to balance efficiency gains with patient well-being in the healthcare industry.
