New tool will help combat health insurance denials

Healthcare payments company Waystar on Monday announced a new generative AI tool that can help hospitals quickly address one of their most costly and time-consuming responsibilities: fighting insurance denials.

Hospitals and health systems spend nearly $20 billion a year trying to overturn denied claims, according to a March report from group purchasing organization Premier.

“We believe that if we can develop software that improves people's lives in a stressful time when they are receiving healthcare, then we are doing a good thing,” Waystar CEO Matt Hawkins told CNBC.

Waystar's new solution, called AltitudeCreate, uses generative AI to automatically draft appeal letters. The company said the feature could help suppliers reduce costs and save them the headache of having to review complex contracts and records to put together letters manually.

Hawkins led Waystar through its initial public offering in June, where it raised about $1 billion. The company handled more than $1.2 trillion in gross claims volume in 2023, representing approximately 50% of U.S. patients.

Claim denials have become a hot topic nationwide following the shooting death of UnitedHealthcare CEO Brian Thompson in December. Americans flooded social media with posts about their frustrations and resentments toward the insurance industry, often sharing stories about their own negative experiences.

When a patient receives medical care in the United States, a notoriously complex billing process begins. Providers such as hospitals, health systems, or outpatient facilities submit an invoice called a claim to an insurance company, and the insurer will approve or deny the claim based on whether or not it meets the company's reimbursement criteria.

If a claim is denied, patients are typically responsible for covering the cost out of pocket. More than 450 million applications are rejected each year and denial rates are increasing, Waystar said.

Providers can ask insurers to reevaluate claim denials by submitting an appeal letter, but drafting these letters is a costly and time-consuming process and does not guarantee a different outcome.

Hawkins said that while there has been a lot of discussion recently about claim denials, AltitudeCreate has been working on Waystar for the past six to eight months. The company announced an AI-focused partnership with Google Cloud in May, and automating claim denials was one of 12 use cases the companies planned to explore.

Waystar has also had an appeals and denial management software module available for several years, Hawkins added.

AltitudeCreate is a tool available within a broader set of Waystar artificial intelligence offerings called AltitudeAI, which the company also introduced on Monday. AltitudeCreate was released to organizations already using Waystar's appeal and denial management software modules earlier this month at no additional cost, the company said.

Waystar plans to make the feature more widely available in the future.

“In the face of all this administrative waste in healthcare, where provider organizations are understaffed and don't have time to even follow up on a claim when it's denied, we're incorporating software that helps automate that experience,” Hawkins said. .