Optum Develops AI-Based Risk Coding for Medicare Patients Amid DOJ Scrutiny

Optum, the health data and care provider unit of UnitedHealth Group, is advancing the use of artificial intelligence to enhance the accuracy of Medicare patient risk assessment. Instead of depending exclusively on traditional diagnosis codes submitted by physicians, Optum is developing an AI-driven system to more precisely gauge patient acuity. This initiative, in collaboration with the Duke-Margolis Institute for Health Policy, represents a shift towards leveraging AI for next-generation Medicare risk coding. Such advancements have implications for Medicare Advantage program risk adjustment and reimbursement methodologies.

This development occurs amid ongoing scrutiny of UnitedHealth Group, with the parent company facing a criminal fraud investigation by the Department of Justice related to Medicare Advantage practices. Additionally, there are civil investigations focused on billing and coding compliance, alongside an antitrust probe. The AI initiative may also impact regulatory and compliance frameworks governing how insurers document and justify risk-adjusted payments.

By integrating AI into risk coding, Optum aims to refine predictive models that influence Medicare Advantage plan payments, potentially leading to more accurate provider compensation and improved resource allocation. The evolution of risk coding practices to incorporate AI technologies could reshape payer-provider interactions and enhance data-driven decision-making within health insurance underwriting.

This approach aligns with broader industry trends toward digital transformation, data analytics, and AI applications in health insurance operations. It reflects a strategic response to regulatory pressures and an effort to innovate coding systems under increased legal and compliance scrutiny. The outcomes of this research could inform policy discussions on Medicare risk adjustment and coding standardization in the near future.

Health insurance professionals, regulators, and policymakers will be closely monitoring the implications of AI-driven risk coding, especially in light of intensified enforcement actions on coding and billing accuracy. The shift underscores the intersection of technological innovation, regulatory compliance, and market dynamics within the Medicare Advantage space.