'This Should Be a National Scandal': For-Profit Medicare Advantage Plans Using AI for Denials

As Medicare Advantage plans rely increasingly upon artificial intelligence to determine—and often deny—payment for patient care, a group of Democratic U.S. lawmakers on Friday urged Medicare's top official to strengthen oversight of AI and algorithmic tools used to make coverage determinations.

"In recent years, problems posed by prior authorization have been exacerbated by MA plans' increasing use of AI or algorithmic software to assist in their coverage determinations in certain care settings, including inpatient hospitals, skilled nursing facilities, and home health," 32 House Democrats led by Rep. Judy Chu (D-Calif.) wrote in a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Books LaSure.

"Advocates and the media report that the use of such software has led to coverage decisions that are more restrictive than allowed under traditional Medicare rules, as well as more frequent and repeated denials of care," the lawmakers wrote. "Absent prohibiting the use of AI/algorithmic tools outright, it is unclear how CMS is monitoring and evaluating MA plans' use of such tools in order ensure that plans comply with Medicare's rules and do not inappropriately create barriers to care."

The lawmakers are calling on CMS to take steps including, but not limited to:

• Requiring MA plans to report prior authorization data including reason for denial, by type of service, beneficiary characteristics (such as health conditions), and timeliness of prior authorization decisions;
• Comparing "guidance" generated by AI and algorithmic tools with actual MA coverage decisions;
• Assessing how and to what extent initial prior-authorized AI determinations for services are adjusted to account for unanticipated changes in a patients' condition;
• Requiring attestation from MA plans and contractors that their coverage guidelines are not more restrictive than traditional Medicare; and
• Determining whether MA plans are inappropriately using race/other factors in these algorithms.

MA plans are not part of Medicare. They are a private health insurance "scam" created by a GOP-controlled Congress and signed into law 20 years ago by then-President George W. Bush "as a way of routing hundreds of billions of taxpayer dollars into the pockets of for-profit insurance companies," according to frequent Common Dreams opinion contributor Thom Hartmann.

A report published last month by Physicians for a National Health Program revealed that MA plans are overcharging U.S. taxpayers by up to $140 billion per year, enough to completely eliminate Medicare Part B premiums or fully fund Medicare's prescription drug program.

The lawmakers' letter is endorsed by advocacy groups including the Center for Medicare Advocacy, Public Citizen, Social Security Works, Center for Health and Democracy, and Business Leaders for Health Care Transformation.

"The use of AI by Medicare Advantage insurers to deny needed care to seniors and people with disabilities represents the most recent and dangerous step by greedy companies focused on profit instead of patients," Public Citizen executive vice president Lisa Gilbert said in a statement.

"Now is the time for CMS to crack down on companies that are using AI and other mechanisms to deny care that would be covered if the enrollee were covered by traditional Medicare," Gilbert added. "Understanding how Medicare Advantage insurers are using AI to deny needed care and holding bad actors accountable are crucial steps to protecting seniors and the Medicare program."

Last year, a U.S. Senate probe found that insurance companies and other brokers are "running amok" with "fraudsters and scam artists" making false or misleading claims to dupe senior citizens into purchasing MA plans.

Progressive lawmakers have also criticized President Joe Biden for delaying promised curbs on Medicare Advantage plans amid heavy insurance industry lobbying.

Earlier this year, Reps. Mark Pocan (D-Wis.)—one of the 32 lawmakers who signed the letter to Brooks LaSure—Ro Khanna (D-Calif.), and Jan Schakowsky reintroduced a bill to change the official name of MA to "alternative private health plan" to make clear that such coverage is offered by for-profit companies.

"The scheme is called Medicare Advantage," Pocan and Khanna explained. "But in reality, so-called 'Medicare Advantage' is neither Medicare nor an advantage."