Insurance Claim Denials: A Persistent Challenge for Patients
Remi Lee was born with caudal regression syndrome, a rare condition impacting the lower body's development. She requires ongoing medical care, including frequent hospital visits, medications, and specialized equipment. Despite her clear medical needs, Lee has faced repeated denials from her health insurance provider.
One example Lee shared involved her insurer labeling essential wound care supplies as a "luxury." Her mother, Roxanne, explained that while appeals usually lead to eventual approval, the initial automatic denials stem from rigid system parameters that don’t account for unique medical situations.
Are Insurers Using AI to Deny Claims Faster?
Lee suspects that claim denials now occur more quickly due to artificial intelligence (AI) systems automatically rejecting appeals. Major insurers like UnitedHealth and Cigna have publicly denied using AI to deny claims. However, legal experts claim otherwise. Ryan Clarkson, attorney at Clarkson Law Firm, highlighted ongoing class-action lawsuits alleging insurers use AI or algorithms instead of licensed physicians to process claims.
These lawsuits point to insurers denying hundreds of thousands of claims over short periods, allowing only seconds per claim review—a timeframe too brief for meaningful evaluation.
The use of AI in claim denials isn't new. Reports from 2023 revealed AI-driven denials have surged in Medicare Advantage plans covering millions. This prompted regulatory bodies like the Centers for Medicare & Medicaid Services to clarify that AI cannot be used to deny claims automatically. Some states are also considering regulations around AI’s role in health insurance decisions.
Patients Fighting Back with AI Tools
While insurers may use AI to speed up denials, some patients are turning the tables by leveraging AI to file appeals. Holden Karau, co-founder of Fight Health Insurance, developed a website that helps patients generate targeted appeal letters using AI based on their specific denial notices.
Karau created this tool after her own insurance struggles. Since launching, the site has been used thousands of times to contest denials ranging from a few hundred to potentially hundreds of thousands of dollars. Her goal is to make the appeals process more accessible, especially for smaller claims that often get denied without thorough review.
As Lee put it, if insurers use AI to deny claims, patients should have access to similar resources to defend their rights.
What This Means for Insurance Professionals
- Understanding AI’s growing role: AI tools may increasingly assist in claims processing, but reliance on automated denials raises concerns about accuracy and fairness.
- Balancing technology with human review: Ensuring claims are evaluated thoroughly requires combining AI efficiency with expert judgment to avoid wrongful denials.
- Supporting patient advocacy: Encouraging transparency and providing clear avenues for appeals can improve patient trust and reduce disputes.
- Keeping up with regulations: Insurance professionals should monitor evolving laws around AI use in claims to remain compliant and ethical.
For those interested in learning how AI tools can be responsibly applied in insurance and appeals, resources like Complete AI Training offer courses that explore practical AI applications in various industries.
Your membership also unlocks:
