In recent years, the number of insurance coverage denials has surged in the US, largely due to AI-driven automated algorithms. Some new AI tools have emerged to create automatic appeals against these denials. However, health experts argue that fundamental reforms are necessary to tackle high medical costs and ensure better coverage. UnitedHealth, Humana, and Cigna are currently facing class-action lawsuits for allegedly using algorithms to deny critical medical care. One lawsuit claims Cigna rejected over 300, 000 claims in just two months, averaging a denial every 1. 2 seconds per physician-reviewed claim. The algorithms are said to have an alarming 90% error rate, as nine out of ten denied claims are overturned upon appeal; yet, only about 0. 2% of patients appeal these denials, often resulting in out-of-pocket expenses or lack of necessary treatment. The issue is exacerbated by the prior authorization process, where less than 10% of denied requests in Medicare Advantage plans were appealed in 2022. Many healthcare practices now have dedicated teams to handle these complex appeals.

A survey revealed that nearly half of US adults have received unexpected medical bills, leading to anxiety and worsened health conditions due to delayed care, with most unaware of their right to appeal. The story of Deirdre O’Reilly, an intensive care physician, illustrates this struggle. After her son’s emergency visit was denied coverage by BlueCross BlueShield of Vermont, O’Reilly experienced a frustrating appeals process that highlighted the inefficiencies and challenges faced by patients. In response to growing criticism, some states are enacting laws to ease prior authorization burdens, while the federal government is introducing new regulations for Medicare Advantage prior authorizations. The appeal costs for providers amount to over $7. 2 billion annually. There is a burgeoning “battle of the bots” as patients and firms employ AI tools to support claims appeals. While some experts see a potential role for improved algorithms in the healthcare system, human oversight remains vital. Concerns persist that relying solely on AI may exacerbate existing issues, including exorbitant healthcare costs. Experts emphasize that America’s healthcare expenditure, constituting one-fifth of the GDP, demands significant reform beyond addressing AI use in insurance decisions.