The Growing AI Conflict in Healthcare
Artificial intelligence is creating a new battlefield in healthcare, with competing systems now determining whether patients receive coverage for medical treatments. According to reports, major health insurers have increasingly turned to AI algorithms to process claims, resulting in what sources indicate are rising denial rates across the industry.
This technological shift has prompted entrepreneurs like Neal Shah to develop counter-AI tools that help patients fight back. Shah told CNET that his breaking point came during his wife’s cancer treatment, when he realized how many legitimate claims were being denied. “I realized I’m not alone and the people using CareYaya are not alone,” Shah said. “There are millions of Americans dealing with this problem. People are drowning in denial claims.”
Rising Denial Rates Nationwide
Health insurance denials have become increasingly common across the American healthcare system. Data from KFF reveals that 20% of all claims across Affordable Care Act marketplace plans were denied in 2023. With ACA plans covering more than 20 million Americans at the start of 2025, analysts suggest these denials affect millions of patients annually.
Despite the frequency of denials, appeals remain rare. Sources indicate fewer than 1% of ACA plan denials are challenged, though when appeals are filed, approximately 40% are successful. “Ninety-nine percent of patients or family caregivers do not appeal,” Shah noted, suggesting most people are intimidated by the process or assume denials are final.
Insurance Companies Deploy AI for Claims Processing
Major insurance providers have increasingly implemented AI systems to streamline claims review processes. A 2022 investigation by ProPublica revealed that Cigna used an AI-driven algorithm to deny more than 30,000 claims in just two months, often without human physician review.
The following year, UnitedHealth faced a class-action lawsuit alleging its nH Predict AI tool prematurely cut off care for elderly Medicare patients. These developments have intensified scrutiny of how insurance companies use technology to manage healthcare costs and claims processing.
Counterforce Health’s AI Solution
Shah’s startup, Counterforce Health, offers a free platform that generates customized insurance appeal letters within minutes. The system analyzes denial letters and medical records, then produces draft responses based on insurance policies, medical literature, and successful appeals.
“Right now, insurers are using AI to deny claims in seconds, while patients and doctors spend hours fighting back,” Shah explained. “That’s not a fair fight. Our mission is to flip the script and make appeals as easy as one click.”
The platform aims to address what analysts suggest is a significant power imbalance between patients and insurance providers. While insurers use sophisticated technology to process claims rapidly, most patients lack the resources to mount effective appeals.
Accessibility and Privacy Considerations
Counterforce’s free model is funded through grants and venture investments, including a $2.47 million grant from PennAITech. Shah emphasized that accessibility was crucial since hiring patient advocates can cost between $80-$150 per hour – prohibitive for many Americans already struggling with health insurance costs.
“Right now, appealing is really for the rich, or I would even say the ultra-rich,” Shah told CNET. The company’s privacy policy states it does not sell personal health information and uses encryption to protect sensitive data.
Medical Community Perspectives
Dr. David Casarett, a professor of medicine at Duke and section chief of palliative care at Duke Health, highlighted the inequality in appeal resources. Casarett, whose profile can be found on the Duke University website, noted that while his family successfully appealed multiple denials for his mother’s cancer treatment, most patients lack similar advantages.
“Our appeals were successful,” he said. “But what about everybody else? What prayer does a single mom with two jobs and a high school education have against a multibillion-dollar insurance industry?”
Broader Industry Implications
This AI-versus-AI dynamic represents a significant shift in how healthcare disputes are handled. As technology continues to evolve, these developments may influence future market trends and regulatory approaches to insurance claim processing.
The emergence of such tools reflects growing innovation in healthcare technology, with startups developing solutions to address systemic challenges. These related innovations could potentially reshape how patients interact with the healthcare system and navigate complex insurance processes in the future.
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