North Carolina Republican lawmakers are pushing a proposal that would limit how artificial intelligence can be used in healthcare, aiming to protect consumers against technology that could lead to bigger bills or denied claims.\u00a0<\/p>\n
\u201cWe do not want robots or computers to deny care to sick people,\u201d state Sen. Amy Galey, R-Alamance, said Wednesday during a committee meeting Wednesday.<\/p>\n
House Bill 565 would prohibit insurers from using AI as the sole basis for denying healthcare claims or prior authorization requests, saying that humans must remain involved in those decisions.<\/p>\n
The legislation also seeks to crack down on hospitals and other healthcare providers that might use AI to inflate their profits through a strategy called \u201cupcoding.\u201d The treatment patients receive, and which they or their insurers are billed for, are cataloged using a highly specific set of thousands of codes.\u00a0 Higher billing codes can lead to higher reimbursements from insurers, Medicaid or the state health plan, increasing overall healthcare costs and potentially leading to people paying higher premiums as well.<\/p>\n
When done intentionally, upcoding can constitute fraud. But when AI is making the decisions instead of humans, healthcare policy experts say, the AI could unintentionally push billing systems toward more expensive codes if there are not clear safeguards and human oversight.<\/p>\n
\u201cWe know that AI can amplify what already exists,\u201d said Alessandra Bazzano, a professor at UNC Gillings School of Public Health. \u201cIf there\u2019s a reimbursement algorithm that rewards severity or intensity, those AI tools might accelerate pressure toward doing that kind of higher coding.\u201d<\/p>\n
Republican lawmakers have previously said North Carolina has among the highest healthcare costs in the nation; this is one of several policies they\u2019ve proposed in an effort to change that. Some of those proposals, such as repealing the state\u2019s certificate-of-need laws or requiring more transparency around medical billing, have failed to pass in the face of intense lobbying by healthcare companies and industry groups.<\/p>\n
Under the new legislation proposed in House Bill 565, providers and vendors wouldn\u2019t be allowed to use AI to recommend or generate billing codes that result in upcoding unless a treating provider reviews the documentation and confirms it is supported by the patient\u2019s medical record.<\/p>\n
The National Association of Insurance Commissioners has found that most health insurers already use AI in some form, including for claim authorization and fraud detection. So in situations where doctors and insurance companies clash over whether a patient receives care \u2014 and, if so, how much it will cost \u2014 it\u2019s becoming increasingly possible that the decisions on both sides are being made by in part by artificial intelligence.<\/p>\n
The proposal reflects a broader national push to ensure humans remain involved in insurance and billing decisions as AI becomes more common throughout the healthcare system.<\/p>\n
Academic researchers generally recommend that insurers require human review of AI-assisted claim decisions, maintain transparency about how algorithms influence outcomes and preserve audit trails showing what recommendations AI systems made and who ultimately approved decisions.<\/p>\n
Kandyce Brennan, co-chair of the AI task force at the UNC School of Nursing, said transparency is essential as AI expands into healthcare administration.<\/p>\n
\u201cWithout that transparency,\u201d Brennan said, \u201cit\u2019s hard to know whether AI is supporting better decision-making or simply automating denials, increasing costs, or reinforcing existing inequities.\u201dAmerica\u2019s Health Insurance Plans, a trade group representing insurers, has supported a national approach to AI oversight and says new legislation shouldn\u2019t duplicate existing laws. In comments submitted to policymakers, the group has said AI tools should augment \u2014 not entirely replace \u2014 human work.<\/p>\n
\t\t\t\t\t\t\tNC lawmakers clash over AI guardrails<\/p>\n
As the legislation moves forward in North Carolina\u2019s Republican-controlled legislature, lawmakers say the legislation is an attempt to balance rapid advances in artificial intelligence with safeguards meant to ensure medical decisions \u2014 especially those involving billing and insurance coverage \u2014 are not left entirely to algorithms.<\/p>\n