AI in Healthcare roadmap faces criticism over blind spot

The Australian Alliance for Artificial Intelligence in Healthcare (AAAiH) has released its third National Policy Roadmap for the widespread adoption of AI across the health system. But critics say it overlooks how AI is already disrupting medical billing, delaying payments to providers and placing more financial pressure on private hospitals.

The AI Roadmap has been informed by extensive consultation across the healthcare sector, incorporating input from more than 96 organisations and 20 peak bodies and government agencies. It is supported by the Australian Institute of Health Innovation (AIHI), the Digital Health Cooperative Research Centre (DHCRC), CSIRO’s Australian eHealth Research Centre and RMIT University.

Professor Enrico Coiera, lead author of the Roadmap, Founder of AAAiH and Director of the Australian Institute of Health Innovation, said the nation has reached a critical point in determining how AI will shape the future of healthcare.

“Healthcare is well known for its inertia to change and so we must find new agile ways to meet these historic challenges. Our mantra must be: Don’t walk. Run,” Professor Coiera said.

Adjunct Professor Annette Schmiede, CEO of the DHCRC, said the Roadmap provides an important opportunity to align the nation’s efforts and ensure the responsible use of AI across healthcare.

“We have witnessed first-hand across our research projects and initiatives the increasing use of AI across health settings. The challenge now is to ensure adoption is guided by clear evidence, strong governance and collaboration across the sector,” Adjunct Professor Schmiede stated.

However, Kathy Rees, Managing Director of Only About Quality and a healthcare administration expert, said the Roadmap failed to address a significant operational issue.

“The critical piece still missing in the discussion is the impact AI will have, and is already having, on medical billing and receipt of payments. Nobody asked the billers,” explained Rees. “The healthcare system runs on the flow of money through it, like any business. AI is already deployed across the payments system and the result is an increase in rejected claims to providers. While this strategy works for the health funds, it can have a devastating impact on providers and private hospitals.”

According to Rees, AI-driven claim rejections are creating growing payment delays for providers and hospitals. Accepted ECLIPSE claims are paid within 15-45 days, but rejected claims requiring manual resubmission can take 45-90 days to process, plus a further 7-10 days for payment, creating delays of up to 100 days. As AI-generated rejections increase, the cashflow impact compounds across hundreds of claims, placing further pressure on private hospitals already operating on lower margins.

“The current IT infrastructure needs to be upgraded, and the MBS itself reviewed for language. Humans cannot even agree on its application, tested in the courts for fifty years without resolution. AI is being tasked with overriding humans in this regard which will, and has, led to delays in payments to providers already, and it is only partially applied to the system as a whole,” added Rees.

Despite the criticism, the Roadmap outlines a broad agenda for accelerating AI adoption across the health system, with recommendations spanning clinical implementation, consumer access, research investment and workforce capability. It raises important concerns about patient data safety and ethical guidelines.

The Roadmap further recommends the creation of a national Chief AI Officer training program to develop a new generation of leaders capable of driving the procurement, governance and implementation of AI across healthcare organisations.

“But without careful attention to how AI is affecting the flow of money through the private healthcare system, the claims, the rejections, the delays, the margins, there may not be private hospitals left to treat them,” emphasised Rees. “The Healthscope collapse was not a clinical failure. It was a financial one. AI accelerating claim rejection into an already stressed payment system is not a governance gap the Roadmap’s authors can afford to ignore.”

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