Market access in the AI era: Potential impacts on prior authorizations

By Michelle Kaner, PharmD, Senior Market Access Strategist, Mosaic

The healthcare industry has long invested in technology, continually seeking to boost productivity and foster innovation. The past year was notably marked by the rise in popularity of generative artificial intelligence (AI), capturing the interest of payers, providers, patients and manufacturers alike. KLAS Research reported that over half of healthcare organizations surveyed are gearing up to either adopt or invest in AI technologies within the year.1 Echoing this enthusiasm on the consumer front, a Deloitte survey of 2,014 adults revealed that 53% of consumers believe generative AI could improve access issues and shorten wait times for medical care.2

At CES 2024, insurance company Elevance Health, which covers 117 million lives, took center stage discussing AI adoption. They highlighted the need to provide members with personalized care recommendations, help them understand their healthcare benefits and simplify the healthcare experience.3 With increased AI adoption among payers, manufacturers must understand the implications of these tools and recognize how they impact the accessibility of their products for patients.3


What makes generative AI unique?
Generative AI differentiates itself from other forms of AI by its capability to create original content including text, images, audio, code, voice and video. This is accomplished through the ability to comprehend complex patterns within datasets.4

Key takeaways from AMCP Nexus 2023 further reinforce the value of AI in market access, highlighting the ability to identify claims errors, prevent fraud and streamline benefit contract reviews. 5



Generative AI use case: Zooming in to focus on prior authorization (PA) support

Generative AI holds the promise of transforming the PA process, traditionally a bottleneck in patient care. According to the American Medical Association (AMA), more than 90% of physicians report that PA requirements delay patient healthcare, placing a significant burden on healthcare providers and straining health plans with the management of case reviews and appeals. Additionally, one-third of these physicians have observed severe consequences due to such delays, including life-threatening incidents or hospitalization for their patients.6 In response to this challenge, Doximity, a digital platform for physicians, introduced generative AI software that assists in administrative writing tasks, like drafting PA letters, appeals, and more.7

It's important to note that payers have also been employing AI technologies, including machine learning and data analytics, to improve various aspects of PAs for some time. However, tech giants like Google, Microsoft and IBM are at the forefront of exploring ways to leverage generative AI to refine the PA process further, aiming to enhance efficiency and alleviate the financial and time burdens currently placed on payers and providers. Generative AI excels at rapidly analyzing data -- it can both summarize extensive information and can identify crucial details that might be missed in manual data reviews. The integration of these AI-driven approaches is expected to address PA-related administrative challenges and inefficiencies, which are estimated to cost the U.S. healthcare system approximately $25 billion annually. The adoption of more automated solutions like generative AI could lead to significant financial savings, possibly as much as $454 million per year.8

Real-world examples of AI adoption by health plans

Blue Shield of California

Utilizing Google Cloud technologies (like the Claims Data Activator), the PA process is accelerated by integrating rule systems and AI models. It reduces manual data entry, provides quick access to patient records through a medical search, and generates structured data. This speeds up decision-making and ensures regulatory compliance.9

Health Care Service Corporation (HCSC)

Leveraging AI, HCSC can process PAs 1,400 times faster than with previous methods. Developed in 2021 and piloted the following year with a focus on specialty pharmacy and behavioral health, the HCSC AI tool achieved an 80% approval rate for behavioral health services and 66% for specialty pharmacy requests. By triaging and approving requests with minimal information, the technology enhances efficiency and frees up clinical staff to review more complex cases.10


Leveraging AI responsibly

“The use of AI in PA can be a positive step toward reducing the use of valuable practice resources to conduct these manual, time-consuming processes. But AI is not a silver bullet.” —AMA trustee Marilyn Heine, MD11

In late 2023, a lawsuit was filed against United Healthcare (UHC) by the families of two deceased Medicare Advantage members, claiming that UHC wrongfully denied coverage for medically necessary post-acute care using an AI-powered algorithm.12 In a parallel scenario, Cigna is also grappling with legal challenges as members and their families allege the inappropriate use of AI tools to deny claims.13


Balancing AI’s capability in healthcare14-17:

  • October 2023: President Joe Biden issued an executive order on artificial intelligence that marked a significant effort to enhance accountability in the development and deployment of AI technology. The order established a framework for addressing privacy, security, safet, and equity issues in AI use, providing a pathway for collaboration between the industry and the federal government while fostering innovation
  • November 2023: House members urged the Centers for Medicare & Medicaid Services (CMS) to evaluate the use of AI by Medicare Advantage (MA) plans to prevent excessive rates of denials. They proposed that MA plans should provide reasons for denials, assess AI’s role and ensure algorithms avoided inappropriate factors. They also called for a comparison of AI rulings to traditional coverage decisions to ensure coverage parity with traditional Medicare
  • December 2023: More than two dozen healthcare payers and providers, including CVS, Premera Blue Cross and Mass General Brigham made voluntary safety, security and transparency commitments to the White House regarding the use of artificial intelligence. Stakeholders aligned industry action on AI around the FAVES principles stating AI should lead to healthcare outcomes that are fair, appropriate, valid, effective and safe
  • February 2024: CMS clarified the application of the Medicare rule CMS-4201-F and the Affordable Care Act on AI use in MA coverage determinations. This guidance ensured that MA organizations could utilize AI for coverage decisions, if they adhere to legal standards and prioritize patient-specific circumstances

Embracing the future

The adoption of AI to streamline processes such as PAs indicates a clear shift in the future of healthcare and market access. However, for manufacturers to navigate this dynamic future successfully and help ensure patient access to therapies, they must not only stay informed about the advancements in AI but also play a critical role in how practices are implemented.

Considerations for manufacturers 


Advocate for ethical AI use

Amid legal scrutiny over unfair denials, advocate for transparent AI-driven PA processes and ensure equitable patient access to therapies

Invest in innovation

Proactively track and analyze which payers are implementing AI technologies for PA management and monitor the outcomes of these implementations to better support practices

Support practices with AI

As payers evolve their approach to using AI in the PA review process, guide practices to rethink their communications in a way that aligns with AI algorithms

While AI is a catalyst for progress in healthcare, it demands a balanced partnership with human insight to reach its full potential for PA use. As with any innovation, keeping abreast of the latest developments is crucial.  Lisa Davis, Senior Vice President and Chief Information Officer at Blue Shield of California, captures this synergy, stating "Artificial Intelligence will never be the be-all end-all. It is an enabler. It's a tool. You have to have people involved in the system that provide that oversight and quality of care.”18



Generative AI 2023: What Are Organizations’ Current Adoption & Future Plans?

2 Can GenAI help make health care affordable? Consumers think so 

3 Elevance Health Addresses Healthcare’s Digital Divide

What Is Generative AI? How Does It Work? 

Harnessing Artificial Intelligence to Increase Productivity and Performance in Managed Care

What is prior authorization? 

Doximity GPT: A HIPAA-Compliant AI Writing Assistant 

Google Cloud Unveils New AI-enabled Claims Acceleration Suite

Blue Shield of California collaborates with Google Cloud 

10 HCSC Transforms Prior Authorization Process 

11 Oversight needed on payers’ use of AI in prior authorization 

12 Lawsuit claims UnitedHealth AI wrongfully denies elderly extended care

13 Cigna using AI to reject claims, lawsuit charges 

14 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence 

15 House letter on AI use in Medicare Advantage denials 

16 Biden-Harris Administration Announces Voluntary Commitments from Leading Healthcare Companies to Harness the Potential and Manage the Risks Posed by AI

17 Frequently Asked Questions related to Coverage Criteria and Utilization Management Requirements in CMS Final Rule 

18 Blue Shield of California collaborates with Google Cloud in pilot to streamline prior authorization for members, providers