Health insurance companies can’t use AI for Medicare

Health insurance - Medicare and AI

Newly released federal guidelines say that artificial intelligence can’t make all the choices.

The Centers for Medicare and Medicaid Services (CMS) have released new guidance for health insurance companies to protect Medicare Advantage (MA) against bias from artificial intelligence (AI).

The CMS is the federal agency overseeing Medicaid, Medicare and other programs

CMS oversees the Children’s Health Insurance Program (CHIP), the Health Insurance Marketplace, Medicare and Medicaid. It recently issued a policy memo to insurers in which it banned them from using algorithmic systems or AI exclusively to decide on a customer’s care or coverage or to shift the criteria of coverage over time.

Health insurance - CMS - Memo

According to the CMS’s definition of AI, it is “a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments.” It went on to caution insurers not to use an “algorithm that determines coverage based on a larger data set, instead of the individual patient’s medical history, the physician’s recommendations, or clinical notes.”

A lawsuit against a health insurance company

Last November, two consumers filed a lawsuit against Humana, accusing the insurer of using nH Predict, an AI model, to decide that the care received by the patients was fraudulent, overriding the recommendations of licensed human physicians, and disproportionately hurting the elderly. The plaintiffs had Medicare Advantage Plan coverage.

This was not the only lawsuit of this nature to have been filed in the United States against an insurer. The UnitedHealth insurance group was sued for using the same AI model as Humana.

Updating the guidance for insurers

“An algorithm or software tool can be used to assist Medicare Advantage plans in making coverage determinations,” said the CMS in the memo it recently issued to insurers. “but it is the responsibility of the MA organization to ensure that the algorithm or artificial intelligence complies with all applicable rules for how coverage determinations by MA organizations are made.”

Moreover, “for inpatient admissions, algorithms or artificial intelligence alone cannot be used as the basis to deny admission or downgrade to an observation stay; the patient’s individual circumstances must be considered.”

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