Was your health insurance claim denied by an algorithm? Thousands are.

Did a doctor or an AI-bot deny your health insurance claim? What you need to know.

Medical bills are expensive and confusing.
Lincoln Crockett

Summer 2023 Health Care Campaigns Intern

After a trip to the hospital, you open up a bill revealing that your insurance company deemed your treatment ‘not medically necessary’ and refused to pay anything. Your claim has been denied – you have to pay the entire cost. In 2021, insurance companies denied on average 17% of in-network claims filed. Claim denials leave people, who pay insurance companies thousands of dollars in premiums to cover their health care costs, with hefty medical bills and medical debt. Yet, almost no patients challenge these denials. But they should. Here’s why.

One doctor at Cigna, in just one month last year, denied 60 thousand claims. How is that possible? She used new artificial intelligence (AI) algorithms developed by insurance companies to deny claims without even having to open the patient files. 

AI Programs speed up the review process, but at what expense?

Until recently, “claims processors” were individuals who reviewed patient’s medical services to either approve coverage or pass the claims along to doctors for further review. But today, computer programs do much of this work. It may not actually be a doctor who determines whether your procedure or prescription is medically necessary.  With the increasing use of algorithms, companies have increased the number of claim denials. In 2021, one company even denied 49% of claims. Doctor review takes a lot of time and money, so insurance companies have turned to AI algorithms to do the work instead. After AI algorithms’s review claims, doctors receive them to give a rubber stamp. One former doctor at Cigna said claims are denied 50 at a time, taking no more than 10 seconds per batch.  If doctors rely too  heavily on the batching of claim denials, they may not understand the nuanced conditions of each patient. 

Patients pay out-of-pocket for every denied claim 

When insurance companies deny claims, patients pay the price. These bills can turn into medical debt, with troubling consequences; people take steps that put their health at further risk. They may hesitate to seek health care in the future or cut costs on food and other necessities. 1 in 7 people with medical debt have even been denied medical care because of their debt.

Appealing claims keeps insurance companies accountable

Right now only 0.2% of denied claims are appealed. That means that almost all patients are taking on the cost of the care from the denied claim. And it lets insurance companies off the hook for paying for care your doctor ordered. You should appeal if you think one of your claims has been wrongfully denied. These denials are not final. Every insurance company has an appeals process. You can even appeal to a third party. If you challenge your denied claim and win, the insurance company has to pay for that part of your medical bill.

How to challenge a health insurance claim denial.

Use our guide on how to appeal insurance claim denials. Share this information with your friends and family.


Patricia Kelmar

Senior Director, Health Care Campaigns, U.S. PIRG Education Fund

Patricia directs the health care campaign work for U.S. PIRG and provides support to our state offices for state-based health initiatives. Her prior roles include senior policy advisor at NJ Health Care Quality Institute, associate state director at AARP New Jersey and consumer advocate at NJPIRG. She was appointed to the Ground Ambulance and Patient Billing Advisory Committee in 2022 and works with patient advocates across the U.S. Patricia enjoys walking along the Potomac River and sharing her love of books with friends and family around the world.

Lincoln Crockett

Summer 2023 Health Care Campaigns Intern

Lincoln Crockett is a student at the University of Chicago. He is passionate about getting consumers the rights they deserve.