Medicare Advantage Bans AI Use For Care Decisions Amid Lawsuits

Key Takeaways:

– CMS has stated that health insurance companies cannot use AI or algorithms to decide care or deny coverage to members on Medicare Advantage plans.
– The clarification followed lawsuits filed against UnitedHealth and Humana, claiming they used a flawed AI tool, nH Predict, to deny care to elderly patients.
– Despite Medicare Advantage plans usually providing up to 100 days of covered care in a nursing home after a three-day hospital stay, patients on UnitedHealth’s plan using nH Predict often stay less than 14 days before facing payment denials.

CMS Clears Ambiguity for Medicare Advantage Insurers

The Centers for Medicare & Medicaid Services (CMS) has officially stated that health insurance companies are not permitted to use artificial intelligence (AI) or algorithms to determine healthcare or deny coverage for members on Medicare Advantage (MA) plans.

This directive came following accusations that major insurance companies, UnitedHealth and Humana have been having recourse to an allegedly erroneous AI-powered tool to reject care to elderly patients on MA plans.

AI and Care Decisions: Law-Suits Trigger Policy Clarification

A memorandum was dispatched to all MA insurers recently shedding light on the MA plan rules. This was done in the wake of patients filing lawsuits against the insurance giants alleging the use of a problematic AI system for their care decisions.

The lawsuits, now pending class-action status, hinge on the repeated use of AI tool, nH Predict by both insurers. This tool was developed by NaviHealth, a subsidiary of UnitedHealth.

Post-Acute Care: Deviations and Disciplines

The legal troubles for the insurance companies root back to the accusations of the tool nH Predict, churning out harsh estimates of how long a patient would require post-acute care. The tool calculates this for instances following an acute injury, illness, or event.

The facilities for such care include, but are not limited to, skilled nursing homes and rehabilitation centers.

The issue at hand was that the estimates were mandated to be followed strictly. Any deviation from the estimates would lead to disciplinary action against NaviHealth employees, even if the estimates did not match the prescribing physicians’ recommendations or Medicare coverage rules.

Covered Care Time Shortened: Impact on Elderly Patients

While MA plans usually provide up to 100 days of covered care in a nursing home after a three-day hospital stay, patients on UnitedHealth’s MA plan reportedly stay less than 14 days before facing payment denials.

This situation brings to light an urgent need to ensure that technology is used responsibly and ethically. It emphasizes the requirement to adapt traditional healthcare regulations to accommodate the expanding use and capabilities of AI quickly.

Confronted with these allegations and ensuing lawsuits, CMS has taken a significant step by disallowing the use of AI or algorithms in making care decisions for Medicare Advantage plan members. This move highlights how essential it is to balance technological advances with patient rights, particularly keeping in mind the vulnerable sections of society, like the elderly who rely heavily on such healthcare services.

To conclude, as insurers and healthcare providers continue to leverage AI for improving healthcare, it remains crucial they respect and adhere to the regulations set out by bodies like CMS. This will ensure that the benefits of AI don’t come at the cost of patient rights or compromise the quality of care. Therefore, the decision to ban AI in care decision-making at least for now, safeguards the patients and upholds the fundamental ethics of healthcare.


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