Most doctors fear insurers using AI to deny coverage

Even as hospitals are looking at ways to use artificial intelligence to improve their operations and patient care, doctors have fears regarding AI’s growing use in approving - and denying - treatment.

Physicians say they’re increasingly worried that insurance companies are using AI as a tool to make it harder for doctors and providers to get authorization for treatment.

Three out of five doctors (61%) said they are worried that insurers are going to use AI to increase denials of pre-approval for treatment, according to a new survey by the American Medical Association.

The growing concern about AI in denying claims highlights the AMA’s latest survey of doctors on prior authorization. The vast majority of doctors say delays in prior authorization, or pre-approval, from payers ends up delaying treatment and, in some cases, prompting some patients to abandon treatment.

Bruce A. Scott, MD, president of the American Medical Association, said in a statement accompanying the survey, “Using AI-enabled tools to automatically deny more and more needed care is not the reform of prior authorization physicians and patients are calling for.”

“Emerging evidence shows that insurers use automated decision-making systems to create systematic batch denials with little or no human review, placing barriers between patients and necessary medical care,” Scott said in a statement. “Medical decisions must be made by physicians and their patients without interference from unregulated and unsupervised AI technology.”

Insurers have defended the use of prior authorization as an essential mechanism to control patient costs and to avoid procedures and treatment plans that aren’t medically necessary.

Doctors aren’t exactly anti-AI, as another AMA survey earlier this month revealed. Two out of three doctors say they are using AI in their practice in some way, up from 38% in 2023, the AMA survey found.

But doctors say they’re also seeking more oversight in how insurers are using AI in the pre-approval process. Nearly half of all doctors (49%) said they want to see regulators taking a closer look at how payers are using AI in approving treatment.

Hospitals have also said they’re seeing more claim denials, and they attribute part of the spike to the use of AI technologies. In a September 2024 report, hospitals said that the AI tools being used by insurers are leading to claims being wrongfully denied.

“Poor applications of these technologies can result in automatic denials of care without consideration of a patient’s individual clinical circumstances or review from a clinician or plan medical director as required,” the hospital association report stated.

Healthcare organizations have been pushing for more automation in submitting claims and in the prior authorization process, and they’ve suggested new technologies should be able to help streamline claims and determine which treatments and medications are typically approved.

Ash Shehata, KPMG’s U.S. sector leader for health care, moderated a panel discussion on claim denials and the use of technology to improve the process at the ViVE conference last week. In an interview with Chief Healthcare Executive®, Shehata said the use of new tools, including AI, “haven't really made any difference.”

“As a health system might improve their ability to submit claims, the payers are also improving their ability to extract the information and deny claims. So we're not really gaining ground here together,” Shehata said.

As with other physician surveys on prior authorization, most doctors say the process is hampering their ability to treat their patients.

More than nine in 10 doctors (93%) say prior authorization is, at minimum, delaying care. Eight out of 10 physicians (82%) said that at least in some cases, patients give up on treatment due to delays in prior authorization.

Nearly three in 10 doctors (29%) say roadblocks in prior authorization have led to a serious adverse event, while nearly a quarter (23%) said delays in approval have led to a patient ending up in a hospital.

The vast majority of doctors (89%) said that prior authorization battles contribute to physician burnout. Doctors also argue the process actually drives up costs, with 40% of physicians saying they have staff who do nothing but work on prior authorization.

Gary Price, president of The Physicians’ Foundation, told Chief Healthcare Executive® in an interview last year that prior authorization demands are worsening.

“It's become a full-fledged obstacle course that frustrates physicians,” Price said. “It delays patient care. It can even prevent good patient care. It lowers the quality of that care.”