Physicians Warn of AI-driven Medical Claim Denials, Urge Legislators to Act

March 17, 2025

As commercial medical insurance companies adopt Artificial Intelligence in the medical claim review and denial process, physicians warn of the need for regulation and patient protection.

PHOENIX, Arizona — The Arizona Medical Association is calling on the Arizona State Senate to put patient safeguards in place as commercial medical insurers deploy Artificial Intelligence in reviewing and denying patients' claims by passing House Bill 2175.

While AI promises innovation for healthcare, the review and denial of medical claims — some of which represent life-changing treatments and procedures — should be left to physicians who can make nuanced clinical judgments about each patient's unique healthcare needs.

"Patients deserve healthcare delivered by humans with compassionate medical expertise, not pattern-based computer algorithms designed by insurance companies," stated ArMA President Nadeem Kazi, MD. "Physicians and patients already face daunting challenges in navigating medical insurers' bureaucratic administrative processes. Taking physicians' clinical experience out of these processes entirely is a misguided step."

The gap between AI's application and its regulation is wide, meaning its use across all industries, especially healthcare, is going largely unregulated. That's why ArMA introduced HB2175 alongside bill sponsor Representative Julie Willoughby at the Arizona State Capitol earlier this year.

"As a nurse and Arizonan, I am proud to champion HB2175," shared Rep. Willoughby. "I've seen firsthand how insurance denials can inappropriately interfere with patient care and wreak havoc on our health system. I came to the legislature to stand up for patients and fight for better care. The need for reform to ensure that AI is used in a fair and responsible manner is undeniable; HB2175 takes a meaningful step forward to rein in the use of AI in medical decision-making, which requires human oversight."

Arizona is in a position to set a precedent for the regulation of AI in U.S. healthcare. HB2175 is among the first legislation in the nation to prohibit the use of AI in reviewing and denying claims for medical necessity and prior authorization requests. The bill would guarantee that cases involving medical judgment are reviewed by licensed medical professionals who have the training, experience, and ethical responsibility to make clinical decisions.

"Perhaps the biggest concern is how AI removes the human element from medical decision-making. Algorithms can process vast amounts of data, but they can't understand the nuances of an individual's health or the judgment calls that doctors make every day," said Michael Dunn, MD, an East Valley physician, in an op-ed published by Arizona Capitol Times. "Instead of trained professionals weighing the specifics of each case, algorithms determine what gets approved and what doesn't — often without enough transparency or accountability."

Following its unanimous passage out of the Arizona State House, HB2175's trajectory is promising, but it still has hurdles left to clear. As it awaits consideration by the Senate, physicians are strongly urging senators to recognize and act on the need for guardrails against AI in situations where Arizonans' health and well-being are at stake.

ADHS Issues Standing Orders for Flu, COVID-19 Vaccine Access

By Admin User • September 18, 2026
Statewide orders keep pharmacists and physicians authorized to vaccinate Arizonans amid uncertainty over the next ACIP meeting. Statewide Orders Cover the 2026-27 Flu & COVID Season The Arizona Department of Health Services has issued statewide standing orders supporting access to the 2026-27 influenza and COVID-19 vaccines approved by the U.S. Food and Drug Administration. Arizonans seeking a flu or COVID-19 vaccine should contact their physician or pharmacy to confirm availability. Why the Orders Were Issued Arizona pharmacists may administer vaccines recommended by the Advisory Committee on Immunization Practices, vaccines recommended by the Centers for Disease Control and Prevention for international travel, or vaccines authorized under a prescription, including a physician-issued public health standing order. With the timing of the next ACIP meeting uncertain, ADHS worked with the Arizona Board of Pharmacy to issue statewide standing orders for the flu and COVID-19 vaccines, which function as a prescription allowing pharmacists and physicians across Arizona to administer them to anyone who wants one. ADHS Medical Advisor Weighs In "Vaccines are one of the most important tools we have to protect our communities. The Influenza and COVID-19 vaccines have been proven safe and effective at preventing severe illness, hospitalization, and death. Vaccines help us limit the spread of disease, reduce pressure on our healthcare system and reduce costs," said Dr. Richard Carmona, ADHS public health medical advisor and the 17th U.S. Surgeon General. "We have issued these standing orders to ensure safe and timely access to the vaccines in alignment with scientific and evidence-based guidance." What Arizonans Should Know The standing orders do not require every pharmacy to offer vaccinations, and they do not guarantee insurance coverage for administration. Coverage and out-of-pocket costs vary by plan, so Arizonans should check with their insurance provider before scheduling an appointment. 

Arizona Asks Supreme Court to Halt Prison Health Care Takeover

By Admin User • September 18, 2026
State attorneys seek an emergency stay after lower courts reject bids to delay receivership of the prison health care system. State Makes a Last-Ditch Appeal Attorneys for the Arizona Department of Corrections, Rehabilitation and Reentry asked the U.S. Supreme Court this week to delay a court-ordered receivership of the state's prison health care system. The request comes after both a federal district court and the 9th U.S. Circuit Court of Appeals declined to pause the takeover. In the recent application, former U.S. Solicitor General Paul Clement, a representative of the department, argued that the state deserves more time to make its case before surrendering control of its operations, including oversight of its employees and health care budget. Roots of the Case The dispute began in 2012 when inmates sued the department, alleging the prison system's inadequate medical, mental health, and dental care amounted to cruel and unusual punishment under the Eighth Amendment. The case went through years of litigation and a failed settlement agreement. In 2023, U.S. District Judge Roslyn Silver ruled that the health care system was "grossly inadequate." The court ordered the prison healthcare system to comply with more than 150 "quality indicators," but according to court-appointed monitors, the department failed to comply with 131 of the measures. In light of this finding, Silver named Annette Chambers-Smith, former director of the Ohio Department of Rehabilitation and Correction, to take over as receiver effective Oct. 19. Arguments on Both Sides Clement argues receivership should be the last resort and that Silver moved to it too quickly. He asserts that the department has made measurable progress, including growing its health care staffing by more than 50%, expanding substance-use treatment access, and adopting a new care model. Corene Kendrick, deputy director of the American Civil Liberties Union National Prison Project, which represents the roughly 25,000 people incarcerated in Arizona prisons, called the department's request a "Hail Mary" and said Silver had given the department years of opportunities to comply before ordering receivership. What Happens Next The Supreme Court has not yet set a deadline for the plaintiffs to respond to the stay request. Separately, the 9th Circuit is now reviewing the merits of the receivership order itself. The department filed its opening brief on Sept. 15, and the plaintiffs' response is due Oct. 15. Information in this article was sourced from the Arizona Mirror .