A new AI tool could potentially save hospitals billions and aid patients in combating health insurance denials.

• Waystar unveiled a new AI tool designed to rapidly resolve insurance denials for hospitals.
• AltitudeCreate, the company's new solution, employs generative AI to draft appeal letters, which can be expensive and time-consuming to create manually.
• The scrutiny of claim denials has intensified in the U.S. after the shooting of UnitedHealthcare CEO Brian Thompson.

On Monday, a health-care payments company unveiled a new AI tool that can assist hospitals in rapidly addressing one of their most expensive and time-consuming tasks: challenging insurance denials.

Nearly $20 billion is spent annually by hospitals and health systems in an attempt to reverse denied claims, as stated in a March report from Premier, a group purchasing organization.

Matt Hawkins, CEO of Waystar, stated to CNBC that the company's goal is to create software that improves people's lives during stressful healthcare moments, making their experience better.

AltitudeCreate, Waystar's new solution, utilizes generative AI to automatically draft appeal letters. This feature can assist providers in reducing costs and alleviating the burden of manually compiling complex contracts and records to create these letters.

In June, Waystar completed its initial public offering, led by Hawkins, and raised approximately $1 billion. The company processed over $1.2 trillion in gross claims volume in 2023, serving about 50% of patients in the U.S.

The shooting of UnitedHealthcare CEO Brian Thompson in December has sparked a nationwide debate over claim denials, with many Americans expressing their anger and frustration on social media.

The billing process for medical care in the U.S. is notoriously complex, with providers submitting claims to insurance companies for approval or denial based on the company's reimbursement criteria.

Out-of-pocket costs for denied claims are often the responsibility of patients, with over 450 million claims being denied annually and denial rates increasing, according to Waystar.

Insured individuals can request that insurers reconsider claim denials by submitting an appeal letter, but this process is time-consuming and costly, and there is no assurance of a favorable decision.

While there has been much debate about claims denials lately, AltitudeCreate has been under development at Waystar for the past six to eight months. In May, the company announced a partnership with Google Cloud that focused on AI, and one of the 12 use cases they planned to investigate was automating claims denials.

Hawkins stated that Waystar has had a denial and appeal management software module for several years.

Waystar's AI offerings include AltitudeAI, which includes AltitudeCreate, which was recently launched and is now available to organizations using Waystar's denial and appeal management software modules at no additional cost.

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

Hawkins stated that in the face of administrative waste in healthcare, where provider organizations are understaffed and do not have time to follow up on denied claims, they are introducing software to automate the experience.