TL;DR
Major health insurers outsource prior authorization decisions to companies like EviCore, which use algorithms to increase denials of care deemed ‘not medically necessary.’ This practice aims to reduce costs but often delays or denies necessary treatments for patients.
A recent investigation by ProPublica and Capitol Forum has revealed that major health insurers are increasingly outsourcing prior authorization decisions to companies like EviCore, which employ AI-driven algorithms to deny medical claims. This practice, aimed at reducing costs, has been linked to a significant rise in denials of necessary care for millions of Americans, raising concerns about the transparency and fairness of insurance practices.
The investigation found that EviCore, owned by Cigna’s Evernorth, manages coverage decisions for over 100 million insured individuals. It uses an algorithm called ‘the dial’ to evaluate prior authorization requests, which can be adjusted to increase or decrease the likelihood of denials. Internal data shows that since 2021, EviCore has denied almost 20% of requests in Arkansas, compared to about 7% for Medicare Advantage plans. Former employees and industry insiders say the algorithm can be manipulated to favor cost-cutting, with some doctors and medical groups criticizing the rigid and outdated guidelines that often lead to delays or inappropriate denials. EviCore claims its guidelines are evidence-based and routinely updated, but critics argue that the primary goal is cost reduction, with some insiders describing the process as prioritizing profitability over patient care.
Why It Matters
This matters because the widespread use of algorithms to deny claims can delay or prevent patients from receiving necessary treatments, potentially worsening health outcomes. The practice also raises questions about transparency, fairness, and the influence of profit motives in healthcare decision-making. As insurers increasingly outsource these decisions, patients and providers may find it harder to challenge denials or understand the criteria used.
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Background
In recent years, insurers have shifted more of their authorization decisions to third-party companies like EviCore, which market themselves as tools to improve healthcare quality and reduce unnecessary costs. The use of AI algorithms to influence denial rates has grown, with some contracts explicitly tied to cost savings. This trend is part of a broader industry effort to control healthcare spending amid rising costs and regulatory scrutiny. Previous reports have highlighted frustrations among doctors and patients over delays and denials, but the extent of algorithmic manipulation and profit-driven motives has not been fully exposed until now.
“They love to deny things.”
— Barbara McAneny, former AMA president
“We are improving the quality of health care, the safety of health care and decreasing unnecessary costs.”
— EviCore spokesperson
“We could control that. That’s the game we would play.”
— Former EviCore employee
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What Remains Unclear
It remains unclear how widespread algorithmic manipulation is across all insurers and whether regulatory agencies will intervene to curb practices that prioritize cost savings over patient care. The long-term impact of these denials on patient health outcomes and trust in the healthcare system is still being studied.
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What’s Next
Regulators and lawmakers may investigate the use of AI algorithms in insurance decision-making. Patients and providers are likely to seek greater transparency and avenues for contesting denials. Industry insiders predict ongoing scrutiny and possible reforms aimed at balancing cost control with patient-centered care.
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Key Questions
How do insurance companies decide whether to pay for a treatment?
Insurance companies often outsource this decision to third-party firms like EviCore, which use algorithms and medical guidelines to approve or deny claims based on what they deem ‘medically necessary’ and cost-effective.
Can doctors challenge denials made by these companies?
Yes, doctors can appeal denials, but the process can be lengthy and complex. Critics argue that the algorithms and guidelines can be rigid, leading to unnecessary delays or denials of needed care.
What is ‘the dial’ algorithm?
‘The dial’ is an internal AI-driven algorithm used by EviCore to evaluate prior authorization requests. It can be adjusted to increase or decrease the number of requests sent for review, influencing denial rates.
Are these practices legal?
Yes, as long as companies follow existing regulations, but there is growing concern about transparency and the ethical implications of algorithm-driven denials that prioritize cost savings.
