TLDR:
- Health insurance companies cannot use algorithms or artificial intelligence to determine care or deny coverage to members on Medicare Advantage plans, according to a memo from the Centers for Medicare & Medicaid Services (CMS).
- The memo comes after lawsuits claimed that UnitedHealth and Humana have been using a flawed AI-powered tool to deny care to elderly patients on Medicare Advantage plans.
- The tool, called nH Predict, produces inaccurate estimates for how long a patient will need post-acute care, which often leads to denial of coverage.
The Centers for Medicare & Medicaid Services (CMS) has clarified that health insurance companies cannot use algorithms or artificial intelligence (AI) to determine care or deny coverage to members on Medicare Advantage plans. The clarification comes after lawsuits were filed against UnitedHealth and Humana, claiming that they have been using a flawed AI-powered tool to wrongfully deny care to elderly patients on Medicare Advantage plans.
The AI tool in question, known as nH Predict, generates estimates for the duration of post-acute care a patient will need after an acute injury, illness, or event. However, the tool has been shown to produce inaccurate estimates, leading to denial of coverage. For example, the tool predicts that patients on UnitedHealth’s Medicare Advantage plan will require significantly less time in nursing homes than what is typically covered by the plan.
In its memo, the CMS stated that coverage decisions must be based on individual patient circumstances and not solely on an algorithm that uses a larger data set. Insurers must reassess each patient’s condition and provide a specific and detailed explanation when denying care. The memo also expressed concerns that AI tools can perpetuate biases and discrimination.
The CMS announcement serves as a warning to insurers, stating that it will increase its audit activities and closely monitor the use of internal coverage criteria by Medicare Advantage plans. Non-compliance with the rules can result in warning letters, corrective action plans, monetary penalties, and enrollment and marketing sanctions.