How Insurance Companies Use AI to Deny Health Insurance Claims (And What You Can Do About It)
In today’s healthcare system, patients often rely on health insurance to pay for life-changing medical care. Yet more and more people are finding themselves staring at a denial letter — sometimes without any real explanation of why. A growing part of this trend is insurance companies’ use of artificial intelligence (AI) and automated algorithms to process, review, and deny claims.
What used to be a human review process largely driven by medical professionals has shifted toward rapid, automated decision-making. And while AI can speed things up, it also carries a big flaw: many denials happen with little to no human involvement or real medical understanding.
In this blog you’ll learn:
How insurance companies are using AI — often to the detriment of patients
Why claims get denied without real review of your medical record
How patients and providers are fighting back with technology
The legal tools that work best for successful appeal letters
Why using an attorney-written, customizable appeal template for just $29 can save you hours of time and thousands of dollars
The Artificial Intelligence Revolution in Health Insurance
Insurance companies claim that AI can make claim processing faster and more consistent. But critics — including healthcare professionals and lawmakers — say the technology is often used to justify denials without meaningful evaluation of clinical details.
According to a report compiled by NBC’s PBS NewsHour, denials have surged as insurers rely on automated systems to sift through sprawling claim volumes. In 2023 alone, approximately 73 million Americans had health insurance claims denied, and less than 1% appealed their denials — often because the appeal process is confusing, slow, and labor-intensive.
Even more concerning: a significant number of these AI systems make determinations without fully reading a patient’s complete medical record — if they’re reading it at all.
AI Tools Often Replace Human Judgment
In some investigations, insurance algorithms have been accused of deciding claim outcomes in seconds — far too quickly to truly understand a patient’s individual circumstances. Algorithms can skim, summarize, or flag claims based on patterns, but they often miss the context and nuances doctors build medical necessity arguments around.
Some AI systems used by insurers integrate predictive models trained to flag “high-cost” or “unusual” claims as denials. Critics say such models prioritize cost savings over patient care — essentially turning medical decisions into financial decisions.
The American Medical Association (AMA) has voiced strong concern about this trend. In a nationwide survey, over 60% of physicians said unregulated AI tools are increasing denials in prior authorization and claims — sometimes with error rates far above acceptable levels. Doctors fear this automated denial practice overrides real clinical judgment and delays necessary care.
When You Get a Denial Without Human Review
One of the most frustrating realities patients face is getting a denial that seems to ignore the details of their case entirely. Denial letters may say things like:
“No documentation was provided” — even though your records were sent
“Not medically necessary” — based on a coded algorithm, not medical review
“Does not meet criteria” — without identifying which criteria or rule was applied
This can happen because the AI systems sometimes flag claims using pattern recognition — for example, comparing your claim to millions of others and rejecting anything that deviates from expected norms. Sometimes the system may never show the human reviewer the actual medical record in full.
In worst-case scenarios, some class action lawsuits have alleged that large insurers like UnitedHealth used AI-driven algorithmic systems to deny claims en masse and override the clinical determinations of physicians.
Patients Are Fighting Back — But It Isn’t Easy
As claim denials increase, more patients are trying to push back on their own. Many spend hours researching appeal deadlines, reading policy language, gathering medical records, and trying to figure out how to explain medical necessity in a way an insurer will accept.
For most people, this process is overwhelming.
Insurance appeal letters are technical documents, not simple complaints. Patients are expected to reference policy provisions, address medical criteria, respond to denial codes, and comply with strict procedural rules—all while managing health issues, work, and family responsibilities.
Even when patients take the time to appeal, many appeals fail because the arguments are unstructured, key details are missing, or the appeal doesn’t align with how insurers evaluate claims. Others give up entirely because the process feels confusing, intimidating, and stacked against them.
The result is that countless people abandon valid claims—not because they were wrong, but because appealing without guidance is simply too difficult.
Why Most Appeals Still Fail
Even when patients do appeal a denied claim, most are unsuccessful. There are several reasons:
✖ The appeal is too generic
AI-generated letters can be vague, repetitive, or miss critical legal/medical connections.
✖ The insurer is using more automated screening
Some insurers apply second-pass automated screening to appeal responses as well.
✖ The appeal doesn’t cite policy language
Insurance companies pay attention when you reference specific plan terms and legal standards.
✖ Medical necessity isn’t clearly supported
There’s often a gap between clinical intent and the insurer’s coverage rules — and insurers exploit that gap.
These common pitfalls highlight why legal structure matters. Templates built by attorneys experienced in fighting insurance claims help close those gaps.
Why a Strong Appeal Saves You Time and Money
Writing a compelling appeal letter — especially after an AI-driven denial — can take hours or even days:
Interpreting the denial letter
Parsing the policy language
Organizing medical documentation
Preparing legal and clinical arguments
Ensuring procedural deadlines are met
For many people, this means:
Weeks of work
Missed deadlines
Appeals that fail from avoidable errors
Thousands of dollars in unpaid bills
But it doesn’t have to be that way.
The Smart Approach: Attorney-Written Appeal Templates
Instead of starting from scratch, you can use a professionally structured appeal template — written by an insurance attorney with years of experience fighting insurance companies — for only $29.
Here’s why this matters:
✔ Save Time
Templates drastically reduce the hours of work needed to draft an appeal.
✔ Increase Success Odds
They include legal language, structural guidance, and areas to customize for your specific case.
✔ Cover All Bases
Templates prompt you to include:
Relevant policy language
Medical necessity arguments
Relevant medical documentation
Timelines and procedural compliance
✔ Affordable Protection
At just $29, a quality appeal template can save you thousands of dollars in unpaid claims and medical debt down the road.
Imagine spending a couple of hours filling in a template that could overturn a denial that would otherwise cost you thousands.
What to Look for in an Effective Appeal Letter
A strong appeal letter that works even against AI-driven denials should include:
✅ Clear Statement of Dispute
Identify what’s being appealed and why.
✅ Reference to Policy Terms
Include exact language from your insurance policy that supports coverage.
✅ Medical Necessity Justification
Explain why the care was appropriate for your condition — not just that your doctor recommended it.
✅ Evidence and Documentation
Cite medical records, doctor statements, test results, and clinical guidelines supporting care.
✅ Procedural Compliance
Ensure you follow insurer’s rules on timing, formats, and addresses.
A template guides you through each of these — with places to plug in your details without guesswork.
Bottom Line: Don’t Let AI-Driven Denials Win
Insurance companies may automate denials, but you have options:
Understand your denial letter and evidence
Use tools to organize information
Rely on proven legal structure to craft your appeal
Your claim is worth fighting for — and the right appeal strategy changes everything.
Get your attorney-written, customizable appeal template for only $29 today — save hours of work and potentially thousands of dollars in denied claims.
Because when it comes to your health and finances, you deserve every tool available to win your claim.
AI in health insurance claims is not inherently bad — but unregulated, opaque denial systems create barriers to care. Until technology is paired with accountability and fairness, the most effective appeals will come from a combination of human judgment and legally structured strategy.
Start with a professional template, customize it to your case, and submit your next appeal with confidence.
You don’t have to battle ruins of automated denials alone — the right appeal changes your odds significantly.
