AI and Unnecessary Utilization

A noteworthy concern surrounding the use of artificial intelligence (AI) in healthcare is its potential exploitation to drive unnecessary utilization. On the one hand, AI can identify patterns in patient data that can inform more effective treatment decisions. For example, AI-powered systems can analyze medical records to identify patients at substantial risk for certain diseases or complications. This can enable healthcare providers to intervene early and prevent adverse outcomes.

On the other hand, AI could generate unnecessary referrals and inflate healthcare costs. For example, an AI-powered system that recommends additional tests or procedures based on a patient's profile could generate unnecessary referrals and inflate healthcare costs. This is particularly concerning in the context of Medicare Advantage (MA) programs, where providers have financial incentives to maximize quality care.

Another example of unnecessary utilization is the potential for AI to justify longer-than-necessary stays in skilled nursing facilities (SNFs). SNF stays are frequently reimbursed at a higher rate than other types of care, and there is a risk that AI-powered systems could justify keeping patients in SNFs longer than necessary to generate higher revenue.

The Legal Ramifications of Unnecessary Utilization

In addition to the ethical and financial implications of unnecessary utilization, there are also significant legal risks. Healthcare providers that engage in unnecessary utilization can face civil and criminal penalties. For example, the False Claims Act allows the government to recover damages from healthcare providers that submit false claims for reimbursement. Additionally, healthcare providers can be subject to sanctions from regulatory agencies, such as the Centers for Medicare & Medicaid Services (CMS).

To mitigate the legal risks associated with unnecessary utilization, healthcare providers must responsibly and ethically use AI. This includes establishing clear criteria for medical necessity, ensuring human oversight, and conducting regular compliance monitoring and internal audits. By taking these steps, healthcare providers can harness the power of AI while minimizing the risks of misuse.