AI Deployed by Both Hospitals and Insurers in Payment War

Artificial intelligence (AI) has reportedly found itself being used by both parties in a nationwide healthcare dispute.

One one side, Reuters reported Thursday (March 12), are healthcare systems turning to AI to be paid more for medical procedures. On the other are insurance companies using the technology to find evidence these procedures were needed.

The issue was raised recently by Centene, an insurer focused on Medicaid patients who said hospitals were aggressively—and perhaps improperly—employing AI revenue software to get reimbursements.

“There have been some of these pockets where folks coming into the emergency department with a fever, all of a sudden all have sepsis,” Centene CEO Sarah London said at a September investor conference, referring to a life-threatening condition requiring an array of interventions.

Reuters also cited a Blue Cross Blue Shield analysis of its commercial hospital claims showing that around $663 million in inpatient spending and at least $1.67 billion in spending on outpatients in the U.S. could be tied to more aggressive, AI-enabled coding practices.

Hospitals, meanwhile, say they need AI to push back against insurance companies. The report cited the example of HCA Healthcare, which said in January that it expects to save around $400 million this year thanks to AI programs.

HCA Chief Financial Officer Michael Marks had previously described the company’s AI use as a response “to the growing denial and underpayment activities from the payers.”

Maulin Shah, the company’s chief health information officer, told Reuters both sides will need to adapt to the changes already underway due to AI.

“It’s going to require adjustments in the relationship between the payers and the providers to understand this new reality,” Shah said. “Unfortunately, what we’re seeing is AI fighting AI.”

PYMNTS explored the growing role of AI in the medical field last month in a conversation with Marschall Runge, former dean and CEO of the Michigan Medicine health system.

While he has been surprised at how fast the adoption of AI has happened, Runge told PYMNTS CEO Karen Webster that he rejects the notion that AI must be error-free before it can deserve a place within clinical settings.

“We can’t require something that’s just unachievable,” he said.

Even when practiced by careful, experienced doctors, medicine still produces errors. To seek perfection from AI before it can be deployed isn’t a true safety standard, he argued. Instead, Runge called for the structure of certification and other guardrails.

“I think anything that we’re doing medically with AI ought to have to be certified and have guardrails,” he told Webster.