Understanding Your Rights: Guardrails for AI in Medicare Coverage Decisions

With the growing use of AI in healthcare, many older adults worry about how it will affect their medical benefits. Traditional Medicare and Medicare Advantage (MA) plans both use artificial intelligence to make coverage and prior authorization decisions.

However, there are guardrails to ensure people still have a human involved in their healthcare decisions.

Medicare recipients should understand how Medicare and MA plans use AI in coverage decisions. If your insurance plan denied a claim or prior authorization, you can file an appeal to have the decision reviewed. For legal help with Medicare coverage decisions affected by AI, contact a local elder law attorney.

How Is AI Affecting Medicare Coverage?

Artificial intelligence (AI) in medical care refers to computer programs and algorithms that analyze data to make decisions. In Medicare, insurance companies use AI to review prior authorization requests, identify wasteful procedures, and streamline healthcare services for Medicare enrollees.

Medicare Advantage (MA) companies can benefit from generative AI to cut costs, streamline workflows, and process claims more quickly. Patients may see the benefits of AI with simple Medicare claims. AI programs can auto-approve simple, low-cost, and common claims. Fast approvals can help Medicare beneficiaries get care quickly without waiting for insurance providers to process a backlog of claims.

However, AI does make mistakes. Leaving medical decisions to AI use alone can put patients at risk. Medicare safeguards require a qualified human clinician to review claim denials (non-affirmations) made by AI automated systems.

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AI for Medicare Prior Authorizations

One of the most common ways MA plans use AI and predictive software programs is for prior authorizations.

Medicare beneficiaries need prior authorization for many services, including specialists, out-of-network care, and high-cost care. Many Medicare prescription drug (Part D) plans also require prior authorization. Prior authorization requests are to ensure the requested services meet a medical necessity.

Prior authorizations may also set limits on what the insurer will cover. For example, if AI tools determine a patient recovering from knee replacement surgery needs 12 physical therapy sessions, the insurance company may only cover 12 sessions. It is up to the patient and their healthcare provider to demonstrate the medical necessity for additional physical therapy.

Can Artificial Intelligence Deny My Medicare Claim?

Medicare plans use AI tools for decision-making, including prior authorization requests, reimbursement, and coverage decisions. However, under the Centers for Medicare & Medicaid Services (CMS) 2024 Final Rule, AI cannot deny a claim without a licensed clinical review.

Not all Medicare decisions require a human review. The use of artificial intelligence can approve claims without human oversight. However, denials must be reviewed by a licensed human clinician.

Medicare requires a clinician to review AI algorithm denials, but the licensed clinician may not have the time or expertise to effectively review the AI claims. Even the reviewing clinician may not understand why the algorithm denied the applicant’s claim. Algorithms based on past insurance decisions may be repeating past errors. Human reviewers are still prone to human error.

Unfortunately, most patients never challenge denial letters. When patients receive a denial notice for a prior authorization request, the letter can be confusing. Even with an explanation of benefits, patients may not understand why the request was denied or their rights to file an appeal. Patients can ask their insurance provider to see the reviewer notes to see how the clinician reviewed their claim.

Medicare Advantage and AI Algorithms

Most Medicare recipients now get coverage through Medicare Advantage (Medicare Part C). Medicare Advantage is delivered through private insurance companies rather than CMS. With Medicare Advantage health plans, most insurance providers make coverage decisions using computer algorithms rather than individual human reviews.

Medicare Advantage plans can use algorithms to determine coverage. However, AI systems cannot base decisions on generalized large datasets rather than the patient’s individual medical history, doctors’ recommendations, or clinical notes. MA organizations must comply with traditional Medicare laws and national and local coverage determinations.

Private insurance companies have used algorithms for insurance claims for years. Health insurance providers use computer programs to review medical claims and identify those with red flags for possible fraud, abuse, or other issues. Artificial intelligence is just an updated version of those computer algorithms.

During Medicare Open Enrollment, many people switch Medicare Advantage plans to get the best plan for their needs. Switching plans always carries the potential for disruptions when transferring care. However, under CMS rules, MA plans cannot use AI-driven decisions that change or disrupt active treatment plans for at least the first 90 days. Contact your plan provider if you have questions about changes to your coverage when you change plans.

Medicare’s Pilot WISeR Model

CMS is piloting a new artificial intelligence system for coverage determinations. The Wasteful and Inappropriate Service Reduction (WISeR) AI model will run from January 1, 2026, to December 31, 2031, in six states: New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington.

The AI program will test whether technology-driven prior authorization can ensure Medicare recipients receive appropriate care while reducing administrative burden.

Options To Appeal When AI Denies Coverage

Whether AI or a human denies your prior authorization request, you can file an appeal. Most people never appeal Medicare denials because they don’t understand their options. However, Medicare and Medicare Advantage plans partially or fully overturn the majority of denials on appeal. If your plan denies your coverage request, talk to your doctor about getting documentation or a letter to support your appeal.

AI bases many decisions on a standard patient profile. You can ask your plan provider for information on why they denied your claim. Your file may show a decision made by the AI algorithm without a separate clinician analysis. Ask your doctor for a note explaining why you do not fit the typical patient profile.

Legal Help to Protect Your Medicare Rights

Medicare is an essential service for many people. Don’t leave your healthcare to your health insurance company or its computer algorithms. CMS requires human oversight of AI-based denials. However, human review does not ensure the insurance company will approve your medically necessary care.

An elder law attorney can review your case and explain your legal options. Your attorney can also file an appeal to get your care approved and covered by your insurance plan. For legal advice about AI Medicare decisions, talk to an experienced elder law attorney.