Last updated: July 7, 2026
How Insurers Are Using AI to Deny Claims in 2026 — And What You Can Do About It
Algorithmic claims review is real, documented, and growing. Here's what we know factually, what your rights are, and how to respond.
What's Actually Happening
Several major health insurers have adopted algorithmic and AI-powered tools in their claims review and prior authorization processes. This has been publicly reported and, in some cases, investigated:
- In November 2023, a class-action lawsuit was filed against UnitedHealth Group (reported by STAT News) alleging that the company used an algorithm called nH Predict to deny post-acute care claims, overriding physicians' recommendations. The lawsuit alleged the algorithm had a known error rate.
- In February 2024, Cigna faced a lawsuit (reported by STAT News) over its PXDX system, which was alleged to have enabled doctors to deny claims in bulk without individual patient file review.
These cases are matters of public record. The underlying question — whether algorithmic tools are being used appropriately in claims decisions — is an active area of regulatory scrutiny.
The Medicare WISeR Program
CMS has developed its own technology tool for Medicare claims review. The Widespread Improper Screening and Evaluation Resource (WISeR) is a decision-support tool used by Medicare Administrative Contractors (MACs) to help identify claims that may require further review.
According to CMS's published compliance program documentation, WISeR is designed to assist — not replace — human reviewers in identifying potential improper payments. It is a screening tool, not an automated denial system.
Is This Legal?
Regardless of how an initial denial is generated — by algorithm, AI model, or human reviewer — insurers are required by federal and state law to provide a human-reviewable appeals process. Under the Affordable Care Act, every health plan must offer both internal appeal and external review processes.
Several states have begun enacting legislation specifically addressing AI in insurance decisions. These laws generally require insurers to disclose when AI or algorithmic tools were used in a claims decision and ensure that a qualified human makes the final determination.
How to Fight an AI-Generated Denial
You Still Have Full Appeal Rights
An AI-generated denial does not reduce your appeal rights in any way. You have the same rights to file a written appeal, request a peer-to-peer review, and pursue an external review as with any other denial.
Ask Whether AI Was Involved in Your Denial
Some states now require insurers to disclose whether AI or algorithmic tools were used in claims decisions. Even in states without specific disclosure requirements, you can ask your insurer directly. The answer may be relevant to your appeal strategy.
Argue the Clinical Facts, Not "the Algorithm"
Your appeal doesn't need to argue against "AI" or "the algorithm." Focus on the clinical facts: your treating physician's rationale, the specific clinical criteria your case meets, and any documentation supporting medical necessity. Learn more about responding to "not medically necessary" denials.
Fighting AI With AI
If algorithms are denying claims at scale, patients deserve tools that can respond at the same speed and precision. ApproveIt uses AI to analyze your denial letter, identify the applicable clinical guidelines, and generate a professional appeal — in 90 seconds instead of hours of research.
Already received a prior authorization denial? Start here.