US EditionBill cutting AI from insurance claims clears first Senate hurdle
- In 2024, amid rising concerns over claim denials, Governor Gavin Newsom signed California's SB 1120 into law, banning AI from outright denying insurance claims, following reports that nearly 26% of claims in California were denied the previous year.
- The increasing use of AI by health insurance companies to speed up claims and tailor coverage is driven by the need for more efficient systems and the potential for administrative cost savings, estimated by McKinsey and Company to be between $150 million to $300 million for every $10 billion in revenue.
- In 2023, insurer Cigna denied over 300,000 claims via an AI-assisted review, raising concerns about biased data influencing AI systems, as they learn from data that can be skewed based on race, gender, or income, potentially leading to devastating consequences for patients.
- Dr. Elisabeth Potter recounted an instance where she was called during a surgery by UnitedHealthcare regarding a patient's coverage, highlighting the potential for misuse of algorithms and the difficulty patients face in understanding claim denials, as even advanced AI can miss crucial context.
- To address these issues, Senator Jennifer Bradley's bill was approved by the Senate Banking and Insurance Committee, restricting the use of AI in insurance claim denials and mandating manual review by a qualified human professional, ensuring human oversight and mitigating risks related to inaccuracies and biases.
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