How AI is Changing Medicare Advantage Claims Denials in Healthcare

The adoption of artificial intelligence (AI) in Medicare Advantage claims processing has accelerated in recent years, sparking debate over its implications for patient care. Major insurers like UnitedHealthcare, Humana, and CVS have deployed AI to streamline prior authorizations, but this shift has coincided with increased claims denial rates, particularly for post-acute care and long-term hospital admissions. This trend has prompted scrutiny from the Senate Permanent Subcommittee on Investigations, which found that AI-based tools might deny care essential to beneficiaries’ health. Some healthcare providers, such as Bristol Hospital in Connecticut, report that delayed approvals due to prior authorizations lead to prolonged hospital stays, adding health risks like falls and infections.

The rise in Medicare Advantage claims denials is not limited to minor issues; patients report waiting weeks or even a month for treatment approval, affecting care timelines, especially for critical services like cancer treatments. Although some industry experts believe that AI could facilitate faster care through automatic approval models, profitability concerns and the preference for cost-saving denial models present obstacles. Hospitals nationwide are burdened by the financial strain of appealing denied claims, costing them billions annually.

For AI to become a true asset in healthcare claims management, transparency and regulation are needed to balance efficiency with ethical standards of patient care. With insurers and regulators now grappling with this AI-driven landscape, how these technologies are governed will determine their impact on healthcare outcomes for years to come.