As Medicare Advantage plans increasingly rely on artificial intelligence (AI) for coverage determinations, concerns about denials and the lack of oversight have prompted 32 Democratic U.S. lawmakers to call for stronger regulations. In a letter addressed to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Books LaSure, the lawmakers express worries about using AI and algorithmic tools by Medicare Advantage (MA) plans, leading to restrictive coverage decisions and frequent care denials. They are urging CMS to take decisive steps to ensure compliance with Medicare rules and prevent inappropriate barriers to care.
Growing dependence on AI in medicare advantage plans
The use of AI and algorithmic software by MA plans to assist in coverage determinations, particularly in care settings such as inpatient hospitals, skilled nursing facilities, and home health, has raised concerns among advocates and lawmakers. These tools have reportedly resulted in coverage decisions that are more restrictive than those allowed under traditional Medicare rules, leading to increased denials of care.
Without clear guidelines and oversight, lawmakers argue that it is uncertain how CMS monitors and evaluates the use of AI and algorithmic tools by MA plans. This lack of transparency raises concerns about potential obstacles to patient care.
Lawmakers call for oversight and accountability
In their letter, the lawmakers call on CMS to take specific actions to address these concerns. Some of their key requests include:
Reporting prior authorization data: Requiring MA plans to report prior authorization data, including the reason for denial, type of service, beneficiary characteristics (such as health conditions), and timeliness of prior authorization decisions.
Comparing AI guidance with actual coverage decisions: Evaluating the “guidance” generated by AI and algorithmic tools against actual coverage decisions made by MA plans.
Adjusting AI determinations for patient condition changes: Assessing how and to what extent initial prior-authorized AI determinations for services are adjusted to account for unanticipated changes in a patient’s condition.
Preventing more restrictive guidelines: Requiring attestation from MA plans and contractors that their coverage guidelines are not more restrictive than those of traditional Medicare.
Addressing potential bias: Determining whether MA plans are inappropriately using race or other factors in AI algorithms.
The medicare advantage controversy
Medicare Advantage plans, which are not part of the original Medicare program, have faced scrutiny and criticism from lawmakers and advocates. Critics argue that these private health insurance plans divert taxpayer dollars into the pockets of for-profit insurance companies. A recent report by Physicians for a National Health Program revealed the potential overcharging of U.S. taxpayers by up to $140 billion annually due to Medicare Advantage plans.
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, have expressed support for the lawmakers’ efforts to address AI usage by Medicare Advantage insurers.
AI denials and seniors’ care
Public Citizen’s Executive Vice President, Lisa Gilbert, emphasized the need to address AI-driven denials of care, stating, “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.” She called for CMS to crack down on companies that use AI to deny care covered under traditional Medicare.
Prior investigations and industry lobbying
Previous investigations have highlighted issues with insurance companies and brokers making misleading claims to persuade senior citizens to enroll in Medicare Advantage plans. Progressive lawmakers have criticized President Joe Biden for delaying promised curbs on these plans, citing heavy insurance industry lobbying.
Efforts to rename Medicare Advantage plans as “alternative private health plans” have been reintroduced by lawmakers, aiming to clarify that such coverage is offered by for-profit companies rather than being part of the original Medicare program.
The increased use of AI by Medicare Advantage plans has raised concerns about the fairness of coverage determinations and potential barriers to care. Lawmakers are urging CMS to take action to ensure transparency, fairness, and compliance with Medicare rules, while advocacy groups and progressive lawmakers continue to push for reforms in the Medicare Advantage system.
