The federal government will restrict how Medicare Advantage plans use predictive technology tools to make some coverage decisions, KFF Health News reported Oct. 5.
Several private insurance providers use a tool called nH Predict, which uses millions of medical records to match patients with similar diagnoses and characteristics. Based on the comparisons, the algorithm anticipates what kind of care a patient will need and for how long.
Providers and patient advocates in several states told KFF Health News they have noticed what they call a "suspicious coincidence": the tool predicts a patient's discharge date and their insurer cuts off coverage that day, even if the patient needs further treatment that Medicare would cover.
A naviHealth spokesperson told KFF Health News that the nH Predict algorithm is not used to make coverage decisions and is intended to help facilities develop personalized post-acute care discharge plans. Length-of-stay predictions "are estimates only."
New federal rules for Medicare Advantage plans begin in January and will rein in the use of algorithms in coverage decisions:
- Insurance companies using the tools are expected to "ensure that they are making medical necessity determinations based on the circumstances of the specific individual as opposed to using an algorithm or software that doesn't account for an individual’s circumstances."
- The tool must still follow Medicare coverage criteria and cannot deny benefits that original Medicare covers. If insurers believe the criteria is too vague, they can use their own criteria as long as they disclose the medical evidence supporting the algorithm.
- Before denying coverage considered not medically necessary, coverage denial "must be reviewed by a physician or other appropriate healthcare professional with expertise in the field of medicine or health care that is appropriate for the service at issue."
Meena Seshamani, MD, PhD, CMS' deputy administrator and director of the Medicare program, told KFF Health News that the agency will conduct audits to verify compliance with the new requirements and enforce action with monetary penalties or enrollment suspension.
More than half of people eligible for full Medicare benefits are enrolled in Medicare Advantage, which is operated by private insurance companies.