Is AI Wrongly Denying UnitedHealthcare Claims?

A class-action lawsuit against UnitedHealthcare has been issued for allegedly using an artificial intelligence algorithm, nH Predict, to wrongfully deny coverage under Medicare Advantage health policies.

The lawsuit claims that the algorithm was used to override physician recommendations and deny claims for extended-care facility stays for elderly patients. The plaintiffs argue that about 90% of these denials, when appealed, are reversed, highlighting the alleged 90% error rate of the AI.

The lawsuit alleges that UnitedHealthcare takes advantage of patients' lack of resources and impaired conditions to sustain these denials. UnitedHealthcare refutes the claims, asserting the lawsuit has no merit. This lawsuit is reminiscent of a previous case against Cigna for similar allegations of using technology to automatically deny patient claims without review.


Blue Cross Blue Shield Companies Report Losses

According to a report from Fitch Ratings, Blue Cross Blue Shield companies reported an average medical loss ratio of 90.2% in the first half of the year. The report includes information about 32 of 33 BCBC companies. Below is a list of BCBS companies ranked by MLRs in the first half of 2023:

  • BCBS Kansas: 103.8%
  • BCBS Vermont: 102.3%
  • Hawaii Medical Service Association: 97.2%
  • BCBS Massachusetts: 95.2%
  • Excellus BCBS: 93.6%
  • BCBS Alabama: 93.4%
  • Cambia Health Solutions (4 Regence plans): 93.3%
  • Blue Shield of California: 92.9%
  • Independence Blue Cross: 92.6%
  • CareFirst BCBS: 92%
  • Premera Blue Cross (2 plans): 91.6%
  • BCBS Rhode Island: 91.3%
  • Florida Blue: 90.8%
  • Highmark (6 plans): 90.7%
  • BCBS North Carolina: 90.6%
  • BCBS Wyoming: 90.2%
  • Elevance Health (14 plans): 90.1%
  • Capital Blue Cross: 90.1%
  • BCBS Minnesota: 89.6%
  • Health Care Service Corp. (5 plans): 89.1%
  • BCBS South Carolina: 89.1%
  • BCBS Kansas City: 88.6%
  • Blue Cross of Idaho: 88.3%
  • BCBS Arizona: 87.2%
  • BCBS Nebraska: 86.3%
  • BCBS Tennessee: 86%
  • Arkansas BCBS: 85.1%
  • BCBS Louisiana: 84.9%
  • BCBS North Dakota: 83.7%
  • BCBS Mississippi: 83.5%
  • Wellmark BCBS: 83.3%
  • BCBS Michigan: 79.7%

Source: Becker’s Payer Issues

DOJ Questions Efficacy of Healthcare Consolidation

Andrew Forman, a leader in the Justice Department's antitrust division, issued statements indicating increased scrutiny of acquisitions in healthcare. Forman highlighted plans for intensified investigations post-merger, focusing on potential attempts to unlawfully monopolize healthcare markets.

He questioned the effectiveness of value-based care, often cited as a reason for mergers, emphasizing the department's concern regarding whether consolidation truly leads to lower prices and improved outcomes. Forman pondered whether these integrations, while argued as beneficial by companies, might actually result in higher prices, decreased innovation, and reinforced market dominance.

Source: Becker’s Hospital Review

Upper Midwest & Southeast States Pay More for Healthcare

A price transparency study published in JAMA Health Forum explores the wide variation in negotiated prices for medical services among different counties. Researchers analyzed public pricing data from Humana for seven services across their national provider network.

The services studied included office visits, emergency room visits, diagnostic procedures like colonoscopy and MRI, and surgeries like hip arthroplasty. The findings revealed significant price discrepancies across counties, with average payments for services varying considerably, such as an established patient office visit ranging from $69 to $114 nationally.

Prices tended to be lower in central U.S. and Florida counties while higher in upper-Midwest and Southeastern areas. The study highlighted that future research should investigate whether these price differences are related to variations in quality or are driven by market dynamics like consolidation and negotiation power. Policymakers and purchasers need to strike a balance between quality care and spending efficiency, considering the implications of these price variations in healthcare markets.

Source: Becker’s Payer

Congress Cracking Down on PBMs

There is increasing bipartisan support for pharmacy benefit manager (PBM) reform within Congress. At a recent Community Oncology Alliance Payer Exchange Summit, experts noted a growing consensus among lawmakers for PBM transparency and accountability. Over 25 bills in Congress and numerous state-level legislative efforts highlight this momentum.

At the federal level, notable bipartisan bills like S.127 (Pharmacy Benefit Manager Transparency Act) and S.1339 (Pharmacy Benefit Manager Reform Act) have garnered attention. These bills aim to tackle issues like pricing transparency, prohibiting spread pricing, and increasing oversight of PBMs. However, concerns exist regarding the effectiveness of penalties in holding PBMs accountable, especially given their significant profits.

Industry experts suggest that PBM legislation with potential passage in 2023 might likely be included in an end-of-the-year package or continuing resolution in Congress. Transparency provisions are deemed more feasible as they don't incur costs, whereas the fate of other bills remains uncertain due to the legislative landscape. There's cautious optimism for reform but also recognition that the final legislative outcome might not be as comprehensive as initially anticipated.

Source: OBR Oncology

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