AI in Healthcare & Science · AI and Health Insurance

Can Health Insurers Use AI to Deny Claims?

Yes, health insurers can and do use AI tools as part of their claims review process, including flagging or recommending denials, though the extent to which AI operates without human review varies by insurer, and this practice has drawn increasing regulatory and legal scrutiny, particularly around transparency and patients' appeal rights.

Medical disclaimer

This page is for general educational purposes only and is not medical advice. It does not replace a consultation with a licensed physician, pharmacist, or other qualified health provider. Always talk to your own care team before starting, stopping, or changing any medication or supplement.

Legal disclaimer

This page provides general information only and is not legal advice. Laws vary by jurisdiction and change over time. Consult a licensed attorney in your jurisdiction before making decisions based on this content.

Key takeaways

Insurers have increasingly incorporated AI tools into utilization review and claims processing workflows.
The degree of human oversight over AI-flagged or AI-recommended denials varies by insurer and specific process.
Use of AI in claims denial decisions has drawn scrutiny from regulators, lawmakers, and in some cases litigation.
Patients generally retain rights to appeal a denied claim, regardless of whether AI was involved in the original decision.

AI Has Become Part of the Claims Review Process

Health insurers have increasingly incorporated AI tools into their claims processing and utilization review workflows, including in ways that touch on whether a claim gets approved or denied. These tools might analyze a claim against coverage criteria, flag claims for further review based on identified patterns, or in some processes, generate a recommendation regarding coverage that human reviewers then act on. The degree to which AI operates with direct human oversight at each step varies meaningfully between insurers and even between different types of claims within the same insurer, so it isn’t accurate to describe a single, uniform process across the industry.

This growing use of AI in claims decisions reflects insurers’ broader interest in managing the scale and cost of processing enormous volumes of claims, but it has also become one of the more scrutinized and debated applications of AI in healthcare.

Why This Practice Has Drawn Scrutiny

The use of AI in claim denial decisions has attracted attention from regulators, lawmakers, patient advocacy groups, and in some cases has become the subject of litigation, largely centered on concerns about transparency, accuracy, and the degree of meaningful human review involved when a claim is denied. Critics have raised concerns about whether AI systems used in this context adequately account for individual patient circumstances, whether patients are given sufficient information about how a denial decision was reached, and whether appeal processes adequately address concerns specific to AI-influenced decisions. This scrutiny reflects the high stakes involved, since a denied claim can have significant financial and health consequences for a patient.

In response to this scrutiny, some jurisdictions have moved to introduce specific requirements or guidance around AI use in insurance coverage decisions, though the regulatory landscape in this area continues to actively evolve and isn’t yet fully settled or uniform.

Patients Generally Retain Appeal Rights

Regardless of whether AI was involved in an initial coverage decision, patients generally retain the right to appeal a denied claim through established internal and, in many cases, external appeal processes, depending on their specific insurance plan and jurisdiction. Understanding your specific plan’s appeal process, and being willing to use it if you believe a denial was made in error, remains an important practical step for anyone facing a denied claim, whether or not AI was involved in the original decision.

Bottom Line

Yes, health insurers can and increasingly do use AI tools in claims processing, including in decisions that lead to denials, though the degree of human oversight varies by insurer, and this practice has drawn significant regulatory and legal scrutiny — patients generally retain the right to appeal a denial regardless of whether AI played a role in the original decision.

Go deeper

Important caveats

The regulatory landscape governing AI use in claims decisions is actively evolving, so specific rules vary by jurisdiction and are subject to change.

Frequently asked questions

Is it legal for an AI system to make the final decision on a health insurance claim denial?

This is an area of active legal and regulatory scrutiny, and specific requirements vary by jurisdiction — some regulations require a form of human involvement in coverage determinations, though the exact standards and how strictly they're enforced differ across regions and continue to evolve.

Can I find out if AI was involved in my claim denial?

This depends on insurer transparency practices and applicable disclosure requirements in your jurisdiction, which vary; asking your insurer directly and reviewing your denial notice and appeal rights information is a reasonable starting point.

What can I do if I believe an AI-driven claim denial was inaccurate?

Patients generally retain the right to appeal a denied insurance claim through the insurer's internal appeals process and, depending on jurisdiction and plan type, external review processes, regardless of whether AI was involved in the original denial decision.

Sources

[1]Health insurance claims and appeals guidance — Centers for Medicare & Medicaid Services
[2]Health insurance consumer protection resources — U.S. Department of Health and Human Services

Written by Editorial Team

Last updated July 25, 2026

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