‘This Should Be a National Scandal’: Medicare Advantage Plans Using AI for Denials

Lambert here: AI won’t develop into a super-consciousness, like “Eunice” in William Gibson’s stupid Agency. Rather, it will be used for grubby, rentier-driven, crapification like this.

By Brett Wilkins, a staff writer at Common Dreams. Cross-posted from Alternet.

As Medicare Advantage plans rely increasingly upon artificial intelligence to determine—and often deny—payment for patient care, a group of Democratic U.S. lawmakers on Friday urged Medicare's top official to strengthen oversight of AI and algorithmic tools used to make coverage determinations.

"In recent years, problems posed by prior authorization have been exacerbated by MA plans' increasing use of AI or algorithmic software to assist in their coverage determinations in certain care settings, including inpatient hospitals, skilled nursing facilities, and home health," 32 House Democrats led by Rep. Judy Chu (D-Calif.) wrote in a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Books LaSure.

"Advocates and the media report that the use of such software has led to coverage decisions that are more restrictive than allowed under traditional Medicare rules, as well as more frequent and repeated denials of care," the lawmakers wrote. "Absent prohibiting the use of AI/algorithmic tools outright, it is unclear how CMS is monitoring and evaluating MA plans' use of such tools in order ensure that plans comply with Medicare's rules and do not inappropriately create barriers to care."

The lawmakers are calling on CMS to take steps including, but not limited to:

  • Requiring MA plans to report prior authorization data including reason for denial, by type of service, beneficiary characteristics (such as health conditions), and timeliness of prior authorization decisions;
  • Comparing "guidance" generated by AI and algorithmic tools with actual MA coverage decisions;
  • Assessing how and to what extent initial prior-authorized AI determinations for services are adjusted to account for unanticipated changes in a patients' condition;
  • Requiring attestation from MA plans and contractors that their coverage guidelines are not more restrictive than traditional Medicare; and
  • Determining whether MA plans are inappropriately using race/other factors in these algorithms.

MA plans are not part of Medicare. They are a private health insurance "scam" created by a GOP-controlled Congress and signed into law 20 years ago by then-President George W. Bush "as a way of routing hundreds of billions of taxpayer dollars into the pockets of for-profit insurance companies," according to frequent Common Dreams opinion contributor Thom Hartmann.

A report published last month by Physicians for a National Health Program revealed that MA plans are overcharging U.S. taxpayers by up to $140 billion per year, enough to completely eliminate Medicare Part B premiums or fully fund Medicare's prescription drug program.

The lawmakers' letter is endorsed by advocacy groups including the Center for Medicare Advocacy, Public Citizen, Social Security Works, Center for Health and Democracy, and Business Leaders for Health Care Transformation.

"The use of AI by Medicare Advantage insurers to deny needed care to seniors and people with disabilities represents the most recent and dangerous step by greedy companies focused on profit instead of patients," Public Citizen executive vice president Lisa Gilbert said in a statement.

"Now is the time for CMS to crack down on companies that are using AI and other mechanisms to deny care that would be covered if the enrollee were covered by traditional Medicare," Gilbert added. "Understanding how Medicare Advantage insurers are using AI to deny needed care and holding bad actors accountable are crucial steps to protecting seniors and the Medicare program."

Last year, a U.S. Senate probe found that insurance companies and other brokers are "running amok" with "fraudsters and scam artists" making false or misleading claims to dupe senior citizens into purchasing MA plans.

Progressive lawmakers have also criticized President Joe Biden for delaying promised curbs on Medicare Advantage plans amid heavy insurance industry lobbying.

Earlier this year, Reps. Mark Pocan (D-Wis.)—one of the 32 lawmakers who signed the letter to Brooks LaSure—Ro Khanna (D-Calif.), and Jan Schakowsky reintroduced a bill to change the official name of MA to "alternative private health plan" to make clear that such coverage is offered by for-profit companies.

"The scheme is called Medicare Advantage," Pocan and Khanna explained. "But in reality, so-called 'Medicare Advantage' is neither Medicare nor an advantage."

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Arizona Slim

    Key point from this article: MA plans are not part of Medicare. They are a private health insurance “scam” created by a GOP-controlled Congress and signed into law 20 years ago by then-President George W. Bush “as a way of routing hundreds of billions of taxpayer dollars into the pockets of for-profit insurance companies,” according to frequent Common Dreams opinion contributor Thom Hartmann.

    To which I say: I am on traditional Medicare, and, thank goodness, I’ve never needed it.

    And, once again, I would like to thank NC for steering me far, far, FAR away from these Medicare Advantage plans. Matter of fact, I am blowing kisses at my computer screen.

    1. Uncle Doug

      Yup. I have, for decades, acted as a volunteer patient advocate. That came about, initially, accidentally, but I’ve taken the role seriously because – well, because patients needing advocacy is a serious matter. So I’ve made sure I’m qualified and prepared.

      When Medicare Advantage first appeared on the scene, to general acclaim, I was naturally suspicious and dug into the details. It was quickly apparent that the scheme is intended to provide an advantage to insurers, not to patients. I’ve been assertively steering folks away from the MA scam from the beginning. It’s often not easy to persuade people; The low premiums and flashy come-ons like gym memberships and stingy vision care allowances are attractive, as they are meant to be.

      Everyone approaching the decisions to be made about Medicare coverage should especially be aware that choosing Medicare Advantage can result in being trapped. The details, as is true of Medicare issues generally, are complex and confusing, but it can be very difficult to switch from Medicare Advantage to “original Medicare.” I have just finished helping a patient and his family make that move. It wasn’t easy, it took a rather long time, and we might well have failed if we hadn’t found a loophole that put him in a new period of “guaranteed issue rights.”

      Tell everyone: Choose original Medicare and buy the best supplement you can afford.

    2. playon

      It may have been a GOP plan to begin with, but take note that the Democratic party has done nothing to undo it since that time, and they have had plenty of opportunities.

      1. Arizona Slim

        And, for some odd reason, the D party isn’t even fighting for such an undoing.

        I mean, come on. They’re fighting for just about everything else.

    3. John Zelnicker

      I wasn’t so smart at the beginning when I hit 65 and I enrolled in a MA plan. It worked fine for me because I only needed two common medications.

      However, after reading all of the analysis and criticism about MA plans, mostly here, I decided to change back to traditional Medicare last year. That part was easy, but I couldn’t qualify for a Medi-Gap supplement. That’s okay, I’m lucky to have some resources.

      1. Uncle Doug

        “I decided to change back to traditional Medicare last year. That part was easy, but I couldn’t qualify for a Medi-Gap supplement.”

        Right. I should have been more specific in my post above.

        You can switch from Medicare Advantage to original Medicare during the annual Medicare Open Enrollment Period and, if you qualify, during a Special Enrollment Period (due to moving, returning to US, Medicaid eligibility termination, etc. — can be complicated).

        For Medigap (Medicare supplement) plans, the key concern is “guaranteed-issue rights.” When you are deemed to have those, Medigap carriers are required to sell you a policy without health screening and can’t charge more due to health or health history. In addition to the original period of eligibility for Medicare itself, guaranteed-issue rights may be acquired:

        * If you chose MA when you first became eligible for Medicare, you have guaranteed-issue rights if you choose to switch to Medigap within the first year.
        * If you switch from Medigap to MA for the *first time* since Medicare eligibility *and then* drop the MA plan within the first year, you have guaranteed-issue rights for Medigap.
        * Within four months of the termination (by the carrier/provider) of an MA plan, you have guaranteed-issue rights.
        * Within two months after moving outside the service area of your MA plan, you have Medigap guaranteed-issue rights.

        Unless I’ve forgotten something (entirely possible!), in other circumstances Medigap insurers can use “medical underwriting,” and can reject you or charge higher premiums based on your health status and/or history.

        Do careful research! Even better advice: Talk to a SHIP counselor like Boomheist! Those folks get good training and are motivated only by civic responsibility.

  2. The Rev Kev

    There has been a trend for a very long time to cut off all contact between corporations and their customers. Telephone trees are one example of this and another is where they hide all the contact details of local branches forcing you to go for a national number – which always seems to be in India. Using AI is just an extension of this. So the other day there was an article on “jail-breaking” AI by the words used and the questions asked. I wonder if this will happen to these particular AIs? Could be fun for some.

    1. Kurtismayfield

      Who needs flappers when we have AI. Heinlen was not imaginative enough for the future we have.

  3. Boomheist

    I have been working as a SHIBA or SHIP volunteer for the last two years – this is a national county-by-county program of volunteer advisors who counsel people about Medicare choices. We are not brokers and get no commissions. I haven’t been doing this very long but what I have observed is that many many people choose MA plans simply because they offer “no premium” plans; ie out of pocket premium costs are limited to the Part B charge of 174.90 only. Yes, there are co-pays, but these aren’t very high. Plus, most MA plans offer drug coverage as well, as well as some other benefits (gym memberships, vision and dental) which look very appealing. One stop shopping, as it were. But, and this is a gigantic “but,” if something goes wrong, if you actually need coverage for medical charges, you stand to have to spend 6,000 or 8,000 out of pocket before you get further coverage. “Out of pocket maximum” this is called. So people signing up for MA plans get the benefit of one stop shopping, lower initial premiums, and some additional small benefits. Everyone on an MA plan is at risk for anywhere from 5,000 to 9,000 every singkle year if they carry high medical carrying costs.

    Plus, and this form the article here, MA plans have restricted networks, and your doctor may not be in the network. MA plans can come and go, change, drop coverage. And then there is the need for referrals and denial of care. I have seen studies that show that only 20 percent of people appeal a denial of a charge, and up to 80 percent of appeals are approved, that is if the person appealing can handle the administrative hassle and wait.

    Original Medicare forces people to spend more for premiums – something for a Part D drug plan (anywhere from 3 to 60 dollars a month) and then a policy to cover the 20 percent that Medicare does not pay, a Supplemental Plan. These can be expensive, up to 250 a month. There are high deductibkle Suppemental plans for 50 a month, wherein you are on the hook for the first 2770 of costs.

    It seems to be a situation where people are forced to get the lowest premium cost plan they can find because they cannot afford additional premium costs. Yet if something happens, if a medical Black Swan strikes, then they face thousands in charges.

    Generally it looks like this – if you are healthy and your parents lived into their 90s, an MA plan might very well save you money in the short and long run, but if you have a family medical history or personal medical history of high medical carrying costs, watch out.

    1. Uncle Doug

      Excellent summary!

      “Premium” Part D plans can be rather more expensive though. Mine is over $100/month now, plus whatever the 2024 increase is (haven’t noticed a notice yet). Plus, often, some copays, even with the best plans. One of my meds has a $146 monthly copay. Plenty of folks have much more burdensome out-of-pockets. And plenty of them can’t afford those burdens.

      1. Pat

        Be prepared. If mine and my friends are any indication it will be a shock.
        One more indication of the capture of our legislative bodies, especially the “if government were run like a business” crowd, Medicare should be allowed to negotiate drug prices. Mind you government should be regulating drug prices period, but can’t get them to lower their stock holdings and lose donations by stopping the price gouging.

      2. upstater

        We dropped Part D… we got hit with ERMA which raised premiums to exorbitant levels. Adding insult, the Part D drug prices were consistently higher, sometimes 4x, than Good Rx. We don’t have a lot of meds and we’ll add it if it becomes advantageous even with the modest penalty.

        1. Skk

          since i get my most expensive drugs ( brilinta farxiga Crestor) directly from India, I have a 87cents a month Part D plan, with a $540 deductible. this strategy works for me, saving $3200 per year on known expenses but with a ‘catastrophic ‘ coverage backup. There’s details like the donut hole that one shd be familiar with to optimize things.

          O apart from prescriptions coverage which is Part D I absolutely agree with getting Vanilla Medicare + the best Medicare supplement plan you can afford.

  4. ed

    Insurance trust fund baby John Fetterman, masquerading as a US Senator, darling of starry eyed liberals and progressives “fighting to protect democracy” is on board with the privatization of Medicare. He along with the rest of the corrupt Congress and Senate are cheerleaders for insurance companies at the public expense. Bad actors are not the problem. It’s the whole system of private health care that has to go.


  5. IM Doc

    I am fighting this right now this weekend.

    It happens 1 time a month or so.

    Patient with MEdicare Advantage Plan has a stroke and ends up in the hospital. The other scenario is usually some kind of trauma. While in the hospital awaiting a rehab unit placement ( as opposed to nursing home or skilled nursing ), we unfortunately discover that unlike Medicare, rehab services are not covered in their advantage plan. This is over and over and over again.

    The CEO has to have some source of funding for the 20 million a year salary after all.

    So we then have to have the patient sit on the ward as the social workers cancel their advantage plan and resume Medicare coverage. So again, no matter what, it is the taxpayer who foots the bill on these very expensive issues.

    This is just sheer insanity. The fact this is allowed to happen is just unbelievable.

    The twist with this article is AI. I wonder what the AI is going to do with all the millions of cash they will earn by denying care? I wonder how long it will take for the AI to maximize its income?

    1. Uncle Doug

      “I wonder how long it will take for the AI to maximize its income?”

      They’re very fast and getting faster. Maximizing and vanishing in a fraction of an eyeblink will likely be here any minute.

  6. JonnyJames

    Very important information that the MassMedia McNews won’t report on. They are too busy focusing on the contrived melodrama in DC, celebrity gossip, demonizing Russia, Iran, China, and sensationalist fluff.

    I do have a quibble with the article; “…They are a private health insurance “scam” created by a GOP-controlled Congress…”

    That is true, but a very important point is that this had to have massive support of the so-called opposition. Both parties (Duopoly Dictatorship) closely adhere to the Bipartisan Consensus (Washington Consensus) of neoliberal Junk Economics and facilitate kleptocracy.

    Both factions in Congress are legally bribed. We have corruption on an institutional level, that should be a national scandal as well.

    1. Rubicon

      What’s going to happen when all of us Baby Boomers are no longer? With the massive poverty in the US of young and up-coming middle-aged folks, there’s NO way they’ll be able to pay for health insurance.

      The Fed’s :”Governing Board” recently came out, last month and stated there were 106 Million Americans with no jobs. Add onto that about 100 million US citizens who work part-time with low wage salaries.

      Seems to us, Boomers are caught in the clutches of these Financiers who are raking in the dough because they know “the end is nigh”.

      1. JonnyJames

        I’m so-called gen X btw, but no matter what generation, I agree: the health extortion racket will get worse. The US already has a health care crisis and the world’s largest bankruptcy and debt due to “health care” costs. I recall Ed G Robinson in an old movie saying “don’t like it? too bad! you better get used to it, cause it’s gonna get worse, see…? That’s my silly humorous way of ridiculing the situation

    2. Paul Peloquin

      Bush added a drug benefit to Medicare, but only on the condition that Medicare was prevented from negotiating drug prices. The Democrats went along with the restriction on the negotiation drug prices so the story goes to secure the drug benefit.

      Obama was elected with a super majority in both houses of Congress and no vote was taken to allow Medicare to negotiate prices. Biden’s Inflation Adjustment Act removes the restriction on Medicare negotiating drug prices with negotiated prices becoming effective in 2026.

      Thanks JonnyJames for reminding us about the corruption of both parties.

  7. David J Pearl

    Apropos Medicare Advantage, are you aware that GEHA is partnering with United Healthcare to push all Federal employees and retirees with standard
    Medicare + GEHA coverage into a new Medicare Advantage plan? They claim the plan does everything standard Medicare + GEHA does (no co-pays or deductibles, and you can see any doc that accepts Medicare), plus a $75 monthly subsidy of the Medicare Part B premium and a free gym membership–and allow you to switch back to standard Medicare + GEHA with one day’s notice. I took the bait, given the ability to switch back, but something is very fishy here. You can’t get something for nothing. https://www.geha.com/plans/medical/medicare-advantage
    Lambert, I thought this would interest you.

  8. Posaunist

    When did the use of algorithms written by humans become “Artificial Intelligence”? Insurance companies have been denying claims for weak or non-existent reasons since insurance was first created. Just because a machine does the dirty work does not mean that the machine is “intelligent.”

    AI is now a marketing term, nothing more. Real AI is still far in the future.

    1. JonnyJames

      That’s a good point. “Intelligence” is accounted for like GDP in the USA. Health Insurance Extortion, monopoly price-gouging, financial parasitism, providing arms to Ukro-Nazis, fundng Israeli Genocide of Palestine are counted as productive economic activities and adds to GDP totals.

      The Techno-Feudal Totalitarian state we live in would have us believe an automated tool is “intelligence”. The CIA is part of the “intelligence” community. Yeah, according to whom?

    2. David in Friday Harbor

      It’s much easier to convince an actual human being, even one working a call center, that they’re wrong and to get tired of telling you to, “Go f**k yourself.” It’s important for Our Billionaire Overlords to be able to eliminate empathy from the money-fountain.

  9. John

    Medicare Advantage is a scam. AI is a scam. Our rentier capitalism is a scam. What passes for representative government in the US is a scam. Caveat: The owners of the representatives are well and profitably represented. The “sheeple”, that’s us, not so much. The “rules based order” is a scam. US concern for human rights is a scam. Caveat: Unless it allows us to get our foot in the door.

    Maybe it is easier to list those things that have not been perverted by being used as scams.

  10. herman_sampson

    This is part of an email sent to me from healthcare.gov. I had just signed up for the last time for health insurance on the marketplace, as I will turn 65 in Spring 2024. I noticed no indication of the the other Medicare options (the non-Medicare disAdvantage) programs.

    If you’re nearing 65, you may almost be eligible for Medicare, so now’s the time to start thinking about your health care coverage options. Learning about Medicare now can help make your coverage choice decisions easier when it’s time to switch to Medicare.

    What are the different parts of Medicare?

    The different parts of Medicare help cover specific services:

    Medicare Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
    Medicare Part B (Medical Insurance) covers doctors’ services, outpatient care, medical supplies, and preventive services.
    Part D (sometimes called “Medicare Prescription Drug Coverage”) covers prescription drugs and are prescription drug plans run by private insurance companies that follow Medicare rules.
    There’s also Part C (sometimes called “Medicare Advantage”) which are health plans from private insurance companies that provide all of your Part A and Part B coverage– and usually Part D, too.

    The HealthCare.gov Team

    This message is paid for by the U.S. Department of Health and Human Services. It was created and distributed by the Centers for Medicare & Medicaid Services. You’re receiving this message because you signed up for email updates from the HealthCare.gov Team.
    This email was sent to —-gmail.com using GovDelivery Communications Cloud on behalf of the Health Insurance Marketplace® · 7500 Security Boulevard · Baltimore MD 21244 · 1-800-318-2596

  11. spud

    i wish that the so-called left would understand who did what to us. it was not carter, reagan, nor the bush’s that destroyed the new deal and GATT, they did do some damage, but it was almost all done by bill clinton.

    bill clintons medicare advantage privatization scam, the mayo clinic says no to privatization because its theft

    just a friendly reminder.


    President Bill Clinton signed Medicare+Choice into law in 1997.
    The name changed to Medicare Advantage in 2003…

  12. Matthew G. Saroff

    We need to start frog marching health insurance executives out of their offices in handcuffs. (I’ve been using that whole “Frog Marching” thing way too much lately)

  13. seabos84

    Processes need to be flow charted, with the flow chart on the web. Each step must have median time it takes to get through the step. The creators and the administrators of the steps must be publicly listed.
    IF you haven’t worked in an administrative process for at least a decade, THEN you can’t be a creator.
    People who create under funded processes or clunky processes need to be fired
    AND banned from their industry.
    [I’d prefer them living in a cage for a decade, eating nursing home garbage … but … I’m trying to be moderate so I don’t scare people.]
    OR, we could just keep the same stupid crap we’re doing and we’ve done for millenia –
    processes for the connected, the insiders, and the affluent.

  14. Jubilados-someday

    I have Medicare A & B plus an “Advantage 65” plan that’s only available to retired state employees. Yes, I know there’s yet another “Advantage 65” plan that doesn’t work that way. People that have helped me greatly say my state Anthem plan’s primo, primo…and I don’t relish learning more about the matter than they seem to know, but maybe I need to. Would appreciate any lowdown anyone may have on this policy of mine.

    To jump over to theory, this AI travesty seems to me to point, like other things, to the fact that our whole economy needs a new paradigm / mission / weltanschauung (surprise, surprise). The make believe out there is BEYOND belief. Chips, chips…we’re gonna make chips galore, and US Steel is scooped up yesterday? This is the same deal as trying to run everything in SW Asia…likely we won’t get hit that hard if we don’t control every inch. Just bear in mind one thing: what shoves everything over into AI-ville is that they cut staff first. It’s a no brainer. The MICIMATT’s enthusiasm needs to be curbed and its spending needs to be curbed. Flat out the nation needs better healthcare. Period. Healthcare can provide jobs for all kinds of immigrants. I do agree MMT will work in this dept, with one caveat: When will too much inflate? It’ll inflate when so much money has gone to Raytheon that workers in other industries and construction will not remember how to resume tasks cause they’ve been striking and/or laid off too long.

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