By Shalina Chatlani, Stateline.org
Medical insurance firms are underneath growing scrutiny for allegedly utilizing synthetic intelligence bots and algorithms to swiftly deny sufferers routine or lifesaving care — and not using a human truly reviewing their claims.
The high-profile killing late final yr of UnitedHealthcare CEO Brian Thompson has targeted much more consideration on so-called prior authorization, the method by which sufferers and medical doctors should ask well being insurers to approve medical procedures or medicine earlier than continuing. There had been protests and outrage over the corporate’s practices for months earlier than Thompson’s demise, and UnitedHealthcare has been accused in a class-action lawsuit of utilizing AI to wrongfully deny claims.
As extra sufferers and medical doctors voice their frustrations, states are responding with laws designed to manage prior authorization and claims evaluations. To date this yr, lawmakers in additional than a dozen states are contemplating measures that might, for instance, restrict using AI in reviewing claims; exclude sure prescription drugs from prior authorization guidelines; be certain that emergency psychological well being care is just not delayed for greater than 48 hours; and require that insurers’ assessment boards embody licensed physicians, dentists or pharmacists with scientific expertise.
Insurers have lengthy required medical doctors to acquire their approval earlier than they’ll pay for sure medicine, remedies and procedures. They argue it’s essential to rein in well being care prices and restrict pointless providers. However many medical doctors and sufferers say the follow has gotten out of hand, inflicting delays and denials of care which might be harming and even killing folks.
In a survey final yr by the American Medical Affiliation, 93% of medical doctors stated that insurers’ prior authorization practices delayed “necessary care” for his or her sufferers. Twenty-nine p.c stated such delays had led to a “serious adverse event,” resembling hospitalization, everlasting harm or demise.
In 2023, insurers promoting plans on the marketplaces created underneath the Inexpensive Care Act denied a mixed common of 20% of all claims. Of the 73 million in-network claims they denied, only one% had been appealed, in keeping with KFF, a well being coverage analysis group.
The federal function
Underneath the Biden administration, the Federal Commerce Fee and the Division of Justice took a firmer hand in opposition to well being care companies alleged to be partaking in habits leading to restricted and dearer look after sufferers. The administration additionally accepted guidelines requiring that starting in 2026, Medicare and Medicaid plans create a streamlined digital course of for reviewing claims, making choices extra shortly and offering particular causes for denying care.
But it surely’s troublesome to carry insurers accountable, in keeping with Timothy McBride, a well being coverage analyst and co-director of a program on the Institute for Public Well being at Washington College in St. Louis.
“Each part of the health care industry — hospitals, pharmaceuticals, insurers — they all have a lot of concentrated power,” McBride stated in a cellphone interview. “And unless somebody actually takes it on directly, it’s going to stay that way. I think the Biden administration tried to take it on, but didn’t make a lot of progress.”
It’s unclear whether or not the Trump administration and Congress will reverse course. Throughout his affirmation listening to on March 14, Dr. Mehmet Oz, President Donald Trump’s choose to guide the Facilities for Medicare & Medicaid Companies, defended using synthetic intelligence in reviewing claims.
“AI can be used for good or for evil, and it to a large extent depends on who’s using it and for what purpose,” Oz informed members of the U.S. Senate Finance Committee. “I think AI could play a vital role in accelerating preauthorization.”
Prior to now, Trump has supported measures to assist sufferers, resembling growing hospital worth transparency and reducing prescription drug costs, McBride famous. However “Republicans and conservatives generally are anti-regulation,” he stated. “My gut feeling would be that they back off on the Biden push on this.”
States have restricted energy to behave on their very own. They’ve authority solely over state-regulated well being plans, which embody Medicaid, plans for state staff and insurance policies residents buy from the ACA marketplaces. About 90 million individuals are lined that method. State legal guidelines don’t apply to the 156 million staff, retirees and dependents who get their protection by means of employer-sponsored well being plans, that are regulated by means of a federal legislation generally known as ERISA.
Moreover, medical insurance firms are massive and have deep pockets, permitting them to simply take in state fines.
However Kaye Pestaina, the director of this system on affected person and shopper safety at KFF, stated states have an necessary function to play.
“Much of the focus around prior authorization at the federal level has kind of originated from state protections, so I imagine there will be continual activity by state legislatures to come at the problem,” Pestaina informed Stateline.
What states are doing
Pestaina stated states are attempting quite a few options. For instance, states resembling Arizona, Michigan and Pennsylvania have given their insurance coverage regulators extra authority to instantly entry claims denial data, so as to overturn choices or probably implement state guidelines. And these efforts have largely had bipartisan assist.
In Pennsylvania, Republican state Sen. Kristin Phillips-Hill pushed by means of bipartisan laws in 2022 to streamline prior authorization practices for state-regulated well being plans after listening to quite a few complaints from sufferers and medical doctors.
The laws created an Unbiased Exterior Evaluate group that enables Pennsylvanians to submit a web based kind to request a assessment if their insurer denies a service or therapy. If the assessment group decides the service needs to be lined, the insurer should achieve this. Earlier than then, sufferers may flip solely to a federal assessment course of, which can have been more difficult to navigate and brought extra time.
“Our reforms created clear rules, clear timelines for the prior authorization process, and it removed ambiguity or uncertainty from the system that at times, insurers could exploit and providers could be confused over,” Phillips-Hill informed Stateline. “Prior to that reform, if you had a denial from your insurer, you had very little recourse.”
This system started in January 2024, and in its first yr the Pennsylvania Insurance coverage Division overturned half of 517 denials, which amounted to claims from 259 folks.
Jonathan Greer, president and CEO of the Insurance coverage Federation of Pennsylvania, stated his commerce group labored with lawmakers to return to an settlement on tips on how to change the prior authorization course of in a method that labored for insurers and affected person advocates. Greer says he thinks Pennsylvania might be a mannequin for different states.
“Prior authorization, I think unfairly, has been characterized as a reason to say ‘no’ by insurers,” Greer stated. “The purpose of prior authorization is to make sure that you know the care that you get is consistent with the care that you need.”
In North Carolina, Republican state Rep. Timothy Reeder is hopeful that his prior authorization invoice will make it throughout the end line this yr. Reeder’s invoice would set tight deadlines on insurers’ declare choices and require firms to have licensed practitioners on their declare assessment boards. Insurers would additionally should publicize a listing of providers they require authorization for.
“I’m not saying that we need to get rid of it completely,” Reeder informed Stateline. “There is a role for some oversight to make sure that things are covered. But right now, I think the system is out of balance.”
However some state legal guidelines have confirmed to be much less efficient than marketed.
In 2021, Texas enacted a first-of-its-kind legislation making a “ gold card” normal, underneath which physicians whose care suggestions are accepted by insurers not less than 90% of the time are exempt from the prior authorization course of. However as of the top of 2023, solely 3% of Texas physicians had earned gold card standing, in keeping with the Texas Medical Affiliation.
That’s why the group is pushing laws that might require insurers to report which preauthorization exemptions they granted and denied and what number of claims went to unbiased assessment. Dr. Zeke Silva of the Texas Medical Affiliation’s legislative council stated it might be “in the same spirit” as what Pennsylvania has executed.
“Our focus with the [Texas Medical Association] is our physicians being able to provide the best care possible. And we want that to be free of burden,” Silva informed Stateline. “We want to minimize third parties coming in and inappropriately denying care that our physicians and our patients think is in their best interest.”
