Technology

Mark Cuban Says AI Tools Can Help Prevent Businesses From Getting ‘Ripped Off’ By Health Insurers

Screenshot/YouTube/AllTheSmokePodcast

Billionaire entrepreneur Mark Cuban said Monday that employers can use artificial intelligence tools to ensure healthcare contracts cannot be “used to take advantage” of them.

Cuban suggested during an interview on the “Digital Health Heavyweights” podcast released Monday that employers can use large language models (LLMs) such as Anthropic’s Claude to examine huge healthcare contracts and highlight areas where they are potentially overpaying. LLMs refer to AI systems that can understand and produce human language by processing sizable amounts of text data, according to IBM.

“Your [pharmacy benefit manager (PBM)] contract, your insurance contract, run them all. Every healthcare contract you have run through Claude or whatever, and just say, ‘Where am I getting ripped off?'” Cuban said during the interview.

“Always on spread pricing, the price they pay the pharmacy versus what they charge you … versus when you get your rebates back whether or not they retain any rebates. They’ll do things like they’ll classify rebates differently from fees so what they’ll say is, ‘Yeah, this is what a rebate is, but it only applies to brand medications, doesn’t apply to specialty [medications],'” Cuban added.

Some experts have warned that PBMs can inflate employer healthcare costs. Some PBMs use spread pricing, where they generate revenue by charging employers a higher rate for prescription drugs than what they pay to reimburse pharmacies for those drugs, according to SmithRx.

Cuban went on to say that LLMs can help users “go through all the details” of huge healthcare contracts.

“And now, because there’s so much scrutiny on rebates, they’re getting smaller rebates, and they’re okay with that because they’re charging fees to the brand manufacturers who are paying them these fees, you know, to offset what they were confiscating from rebates. And so, you want to make sure that you go through all the details,” Cuban said. “And that’s why I say use the LLM, because totally our eyes roll back in our heads whenever we try to get into the minutia and the small print of all these 100-page contracts or more … They’re huge for a reason because they know there’s not enough coffee on the planet for anybody to get through all that.”

“And so you [have] to be able to go through and realize that every single definition, every single word in your contract is being used to take advantage of you,” he continued. “You can’t assume that you understand what a word means in that contract.”

Cuban added that people also “can’t assume that even the numbers that [health insurers] put in there are going to be accurate.”

Cuban’s comments come as healthcare costs have been soaring across the U.S. over the years. In 2022, Cuban launched the Mark Cuban Cost Plus Drug Company in an effort to ensure Americans can have “access to safe, affordable medicines.”