US regulators expose AI playing doctor in healthcare, taking action.


  • US regulators are cracking down on the use of AI algorithms in determining eligibility for government healthcare coverage.
  • A memo from the Centers for Medicare & Medicaid Services (CMS) addressed controversy over the use of AI software that has led to lawsuits.

AI algorithms used to determine eligibility for US government healthcare coverage are facing strict regulations from regulators. The federal agency Centers for Medicare & Medicaid Services (CMS) issued a memo to health insurance companies, which addressed the controversy over the use of AI software in denying Medicare Advantage coverage. Medicare Advantage is a privately run alternative to the US federal government’s standard Medicare offerings. The memo stated that an algorithm determining coverage based on a larger data set instead of the individual patient’s medical history, the physician’s recommendations, or clinical notes would not be compliant with Medicare rules.

UnitedHealthcare, which offers Medicare Advantage plans, faced a lawsuit in November accusing the company of using a faulty AI system to deny care to patients. The healthcare AI model used, nH Predict AI, was criticized for using generic healthcare data that does not account for individual patient needs.

Health insurance firm Humana faced a similar lawsuit in December. The lawsuits against UnitedHealthcare and Humana both allege that AI algorithms were used to deny inpatient care, which is against the law. CMS stressed that AI algorithms cannot be used as the sole basis for denying or downgrading inpatient admissions. Additionally, CMS warned that healthcare decision algorithms can exacerbate discrimination and bias, which is prohibited under the US Affordable Care Act.

The impact of the CMS memo on the UnitedHealthcare and Humana lawsuits remains unclear. CMS declined to comment on the matter.