Insurers expand automated reviews as clinicians sound the alarm
Insurance companies have accelerated deployment of automated decision systems across claims, prior authorization and utilization management, prompting doctors to warn that routine care could be delayed or denied. Regulators and industry groups say the trend is widespread: about 84 percent of insurers report using artificial intelligence or machine learning for a range of functions, and a recent survey found 61 percent of physicians believe those tools are increasing prior authorization denials.
What the data show
A 2024 Senate investigation found major Medicare Advantage plans increased denials for post-acute services as they implemented predictive technologies, raising questions about whether cost-driven automation is substituting for clinical judgment. The report focused on practices at several large plans and documented sharp rises in denials for skilled nursing and other recovery services during the period reviewed.
Independent reporting has further highlighted how some automated review pathways have been configured to save money. In one widely cited example, a program used by a national insurer routed claims into expedited reviews that, according to internal documents, were meant to cut payouts. Investigators found reviewers often spent only seconds on cases flagged by the system.
Insurers frame the change differently
Payer executives say automation is a necessary response to rising bills. Some argue that hospitals' use of advanced documentation and coding tools has boosted billed costs, and that algorithmic reviews help detect low-value or improperly coded claims. One analysis cited by payers linked AI-assisted coding increases to higher inpatient bills and sizable additional spending. Insurers also point to investments in systems that can speed routine approvals and free clinicians from paperwork.
Providers push back and adapt
Clinicians describe a shift in where the work falls. Many report more frequent delays and disrupted care tied to prior authorization workflows, and some medical practices are now using the same generative tools insurers deploy to automate appeal letters and gather evidence faster. That tactical one-upmanship is growing, but doctors say it is a stopgap. A survey found a large share of physicians have seen patient care delayed because of authorization processes, and professional groups are calling for stricter controls on how automation influences coverage decisions.
Regulators and reform efforts
Federal agencies and state regulators have begun to respond. CMS has issued guidance restricting the use of automated systems to make final coverage decisions for Medicare Advantage patients, and industry groups have pledged voluntary protections including human review of clinically substantive denials. Observers say the measures fall short of the transparency and auditability experts recommend.
The balance ahead
Health policy researchers warn the debate is not about banning tools but about governance. If algorithms are to help control costs, experts say they must be transparent, subject to independent audit, and designed so clinical judgment remains central. Absent those safeguards, clinicians worry the squeeze on routine services could become a systemic feature of care management rather than an occasional error. The emerging evidence has already pushed lawmakers and professional societies to press for clearer rules and stronger oversight.