Lawsuits Target Health Insurance Companies' Use of AI Tools to Process Claims

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The health insurance industry's growing use of artificial intelligence faces growing legal challenges, with patients claiming insurers are using the technology to unfairly deny coverage for essential medical services.

The complaints, which target health insurers United Healthcare and Humana, have raised fears that the integration of AI into the health insurance sector will increase coverage claim denials, preventing chronically ill and elderly patients from receive quality medical care. A series of coverage denials is fueling calls to increase government oversight of the health insurance industry's largely unregulated use of AI, experts told CBS MoneyWatch.

A class-action lawsuit, filed Dec. 12, alleges that health insurer Humana used an artificial intelligence model called nHPredict to unfairly deny medically necessary care to elderly and disabled patients covered by Medicare Advantage, a Medicare-approved plan administered by private insurers. . Another lawsuit, filed last month, alleges that United Healthcare also used nHPredict to reject claimsdespite knowing that approximately 90% of the coverage denial tools were defective, overriding patient doctors' determinations that the expenses were medically necessary.

A Humana spokesperson said the company uses “several tools, including augmented intelligence to expedite and approve utilization management requests” and “maintains an 'informed human' in decision-making whenever AI is used.” The spokesperson added that Humana does not comment on pending litigation.

United Healthcare did not respond to CBS MoneyWatch's request for comment.

Use of AI by Humana and United Healthcare

NHPredicts is a computer program created by NaviHealth, a subsidiary of United Heathcare, that develops personalized care recommendations for sick or injured patients, based on “real-world experiences, data and analysis,” according to its website, which notes that the tool “is not used to deny care or make coverage determinations.”

But recent litigation is challenging that last claim, alleging that the “nH Predict AI model determines coverage criteria for Medicare Advantage patients in post-acute care settings with rigid and unrealistic recovery predictions.” Both United Healthcare and Humana are being accused of instituting policies to ensure that coverage determinations are made based on the results of nHPredicts' algorithmic decision-making.

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“Humana employees who deviate from the NH Predict AI model projections are disciplined and terminated, regardless of whether a patient requires further care,” a lawsuit states.

Similarly, United Healthcare “disciplined and terminated” employees who deviated from nH Predict guidelines, “regardless of whether a patient required further care,” according to a lawsuit against the insurer.

NaviHealth did not respond to CBS MoneyWatch's request for comment.

Increase in claim rejections

David Lipschutz, an attorney who advocates for Medicare patients, said he has seen “more frequent” and “inappropriate” insurance claim denials this year. The changes coincide with health insurance companies' adoption of AI to determine coverage for Medicare patients, he said.

“In our experience, the use of these algorithmic tools has led to more denials or premature terminations of coverage for things that would otherwise be covered,” Lipschutz said.

In 2021, insurers denied nearly one in five claims they received, compared to several years earlier. according to KKF.

Still, according to Lipschutz, it's impossible to know whether insurers' AI tools are directly responsible for the increase in claim denials. Because insurance companies are not legally required to disclose the reasons behind their coverage decisions, publicly available data on insurers' claims review processes is sparse, making it difficult to determine what is driving denials, he said.

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Cindy Cardinal, a North Carolina retiree who cares for her octogenarian father, has spent more than a year fighting several claim denials from United Healthcare, the insurance company that offers her father's Medicare Advantage plan.

The first fight began when Cardinal's father broke his hip, forcing him to undergo emergency hip replacement surgery. After the operation, a doctor recommended that he be admitted to an intensive inpatient rehabilitation program to help regain his mobility.

The program would cost $1,800 per day out-of-pocket, about the same cost as the average mortgage payment in the state of North Carolina.

Cardinal said a response to his father's claim came within minutes: United Healthcare would not pay the bill.

The insurer did not provide any information about how it decided it would not cover the care ordered by her father's doctor, she said.

Lipschutz said the litigation against UnitedHealthcare and Humana could accelerate efforts to regulate the application of artificial intelligence technology within the health insurance industry, even if a resolution to the current battles does not come for several years.

“Through litigation, legislation and the court of public opinion…(there is) hope that this type of inappropriate behavior will decrease,” he said.

Last week, Cardinal's father moved into his house. He said he has recently been fighting for coverage of his father's physical therapy sessions, sometimes spending hours on the phone with United Healthcare. Her father's doctor also just recommended palliative care. Cardinal anticipates having to fight for coverage for that as well.



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