The Centers for Medicare & Medicaid Services (CMS) sent a memo to all Medicare Advantage insurers, making it clear that health insurance companies cannot use algorithms or artificial intelligence to determine care or deny coverage to members on Medicare Advantage plans. This comes after patients filed lawsuits claiming that UnitedHealth and Humana have been using a flawed AI-powered tool called nH Predict to deny care to elderly patients on MA plans.
The lawsuits allege that the nH Predict tool produces harsh estimates for how long a patient will need post-acute care in facilities like nursing homes after an acute injury, illness, or event. It is also claimed that the tool does not always align with physicians’ recommendations or Medicare coverage rules. The CMS memo specifically states that coverage decisions must be based on individual patient circumstances rather than a larger data set or algorithm.
The CMS emphasized that while AI tools can be used by insurers to ensure adherence to coverage criteria, they should not be used to shift coverage criteria over time or apply hidden coverage criteria. The memo also expressed concerns about the possibility of AI tools reinforcing discrimination and biases, and warned insurers to ensure that any AI tool or algorithm they use does not perpetuate or exacerbate existing bias.
The memo concluded with a warning to insurers that the CMS will be increasing its audit activities and monitoring closely whether MA plans are utilizing and applying internal coverage criteria not found in Medicare laws. Non-compliance may result in penalties and sanctions.
