Payer & Health Plan Governance
AI Governance Consulting for Health Plans and Payers
What health plans and payers need to govern AI used in coverage determinations, prior authorization, and utilization management, under rules that already apply.
Health plans and payers already face three sets of AI-specific rules: NAIC's Model Bulletin adopted by 24 states, CMS's requirement that Medicare Advantage coverage AI account for each patient's individual circumstances, and HHS's Section 1557 ban on algorithmic discrimination in patient care decision tools. Kriv AI helps payers govern AI against all three, starting at $200 per hour.
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Three Rules Already Govern AI at Health Plans
Health plans and payers using AI for coverage determinations, prior authorization, or utilization management are not waiting for future regulation. Three separate rules already apply.
NAIC's Model Bulletin on insurer AI use
The National Association of Insurance Commissioners adopted its Model Bulletin on the Use of Artificial Intelligence Systems by Insurers in December 2023, and 24 states have since adopted substantially similar bulletins. It directs insurers, including health insurers, to maintain a written AI governance program with board and senior-management accountability, document risk management for every AI system, and extend that oversight to third-party AI vendors and tools the insurer did not build itself.
CMS on AI in Medicare Advantage coverage decisions
CMS's 2024 Medicare Advantage and Part D final rule (CMS-4201-F), effective for coverage beginning January 1, 2024, confirmed that Medicare Advantage organizations may use AI and algorithms in coverage determinations, but only when the determination is based on the specific individual's circumstances, not solely on a larger data set or population-level algorithm output that ignores the individual's medical history and clinical notes.
section 1557
HHS Section 1557 and Algorithmic Discrimination
HHS finalized its updated Section 1557 nondiscrimination rule on May 6, 2024, and it defines patient care decision support tools broadly, covering not just clinical algorithms but AI and machine learning systems used in coverage and care decisions. Covered entities, which includes most health plans receiving federal funds, have an ongoing duty to identify where these tools use inputs correlated with race, color, national origin, sex, age, or disability, and to make reasonable efforts to mitigate discrimination risk.
CMS has separately flagged that AI and algorithms used by Medicare Advantage plans can exacerbate discrimination and bias if not governed carefully, tying the coverage-determination rule directly back to Section 1557's nondiscrimination requirements. A payer running AI in utilization management is now expected to satisfy both standards with the same underlying documentation.
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What an AI Governance Engagement Includes for Payers
The work starts with an inventory of every AI system touching a coverage, prior authorization, or utilization management decision, including vendor tools like predictive length-of-stay or care-management models the payer licenses rather than builds. Each system gets a named owner and a risk tier based on the decision it influences.
Because CMS and Section 1557 both turn on whether a decision accounts for the individual's circumstances, validation focuses on testing whether the model's output changes appropriately when an individual patient's clinical facts diverge from the population the model was trained on, plus a documented bias and disparate-impact review across protected characteristics.
The engagement closes with a governance structure mapped to the NAIC bulletin's own expectations: board-level reporting, a documented AI risk management program, and a vendor oversight process for any AI tool the payer did not build in-house.
That vendor oversight piece matters more for payers than for most regulated industries, because the AI systems driving prior authorization and utilization-management decisions are frequently licensed from a third party rather than built internally. The NAIC bulletin does not let a payer treat a vendor's AI as someone else's compliance problem; the insurer using the tool carries the governance obligation regardless of who wrote the model.
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What You Get at Each Tier
1. Enterprise / regulated (health plans, payers, insurers)
A full AI governance program: inventory of AI touching coverage and utilization-management decisions, individual-circumstances validation testing, bias and disparate-impact review, and a governance structure mapped to the NAIC bulletin's board-reporting expectations.
2. Fractional AI governance lead
Ongoing oversight as new AI vendor tools enter utilization management, plus regular reporting to compliance and the board on AI risk.
3. Specialized advisory
Targeted review of a single coverage-determination model, or a second opinion ahead of a state market-conduct exam.
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Kriv AI's Rates for This Work
These are Kriv AI's own published rate floors, not a market average.
| Track | Kriv hourly rate | Typical engagement model | Minimum engagement |
|---|---|---|---|
| Enterprise / regulated (health plans, payers, insurers) | From $200/hr | Fixed-scope project or retainer | $8,000 |
| Fractional CTO / AI governance lead | $300 to $400/hr | Part-time, ongoing (monthly) | $8,000 |
| Specialized advisory (model risk, expert consults) | $400 to $700/hr | Hourly, per-session | Varies by engagement |
| Small business | $150/hr | Referred to Kriv AI's partner network | n/a |
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How to Get a Real Quote
The rates above are floors, not a quote. Actual price depends on how many AI systems touch coverage or utilization-management decisions, how many are vendor tools versus built in-house, and whether the work is a one-time inventory or ongoing oversight. Book a discovery call and we will scope it honestly.
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Straight answers
Frequently asked questions about AI Governance Consulting for Health Plans and Payers
What is the NAIC Model Bulletin on AI?
The NAIC's Model Bulletin on the Use of Artificial Intelligence Systems by Insurers, adopted December 2023 and now in effect in 24 states as substantially similar bulletins, requires insurers to run a written AI governance program with board accountability and to oversee third-party AI vendors.
Can Medicare Advantage plans use AI to deny coverage?
CMS's 2024 final rule confirms MA plans may use AI in coverage determinations, but only when the decision accounts for the specific individual's circumstances, not solely a population-level algorithm that ignores the patient's own medical history and clinical notes.
Does Section 1557 apply to AI used by health plans?
Yes. HHS's May 2024 final rule covers patient care decision support tools broadly, including AI and machine learning, and requires covered entities, including most health plans, to identify and mitigate discrimination risk in how those tools use protected characteristics.
What AI systems do health plans need to inventory first?
Any AI touching coverage determinations, prior authorization, or utilization management, including vendor tools like predictive length-of-stay or care-management models the plan licenses rather than builds in-house.
What does AI governance consulting cost for a health plan?
Kriv AI's rates start at a $200/hr floor for enterprise and regulated payer work, with an $8,000 minimum engagement. Specialized model-risk advisory runs $400 to $700/hr.
Does Kriv AI work with smaller regional health plans?
Small-business work is referred to Kriv AI's partner network at a $150/hr rate. Kriv AI's own consulting practice focuses on enterprise and regulated payer organizations.
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