The health insurance industry’s growing use of artificial intelligence is facing mounting legal challenges, with patients claiming insurers are using the technology to wrongly 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 industry will lead to denials of coverage claims, preventing chronically ill and elderly patients from receiving quality medical care. A spate of coverage denials is fueling calls for increased government oversight of the health insurance industry’s largely unregulated use of AI, experts told CBS MoneyWatch.
A class-action lawsuit filed Sept. 12 alleges that health insurer Humana used an AI model called nHPredict to wrongfully deny necessary medical care to elderly and disabled patients covered by Medicare Advantage, a Medicare-approved plan run by private insurers. Another lawsuit filed last month also alleges United Healthcare uses nHPredict to reject claimsdespite knowing that approximately 90% of instrument coverage denials were defective, which took precedence over patients’ physicians’ decisions that the costs were medically necessary.
A Humana spokesperson said the company uses “various tools, including augmented intelligence to expedite and approve requests to manage utilization” and “supports a ‘human in the loop’ in decision-making when 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, 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 experience, data and analytics,” according to its website, which notes that the tool ” is not used to deny care or make coverage decisions.”
But recent litigation disputes that last claim, claiming that “the nH Predict AI model defines coverage criteria for Medicare Advantage patients in post-acute care settings with rigid and unrealistic recovery predictions.” Both United Healthcare and Humana are accused of putting policies in place to ensure that coverage decisions are made based on the output of nHPredicts’ algorithmic decision-making.
“Humana employees who deviate from the nH Predict AI Model’s predictions are disciplined and fired, regardless of whether the patient needs more care,” one lawsuit states.
Similarly, United Healthcare “disciplined and fired” employees who deviated from nH Predict guidelines, “regardless of whether the patient required[d] more care,” according to a lawsuit against the insurer.
NaviHealth did not respond to CBS MoneyWatch’s request for comment.
An increase in rejected claims
David Lipschutz, an attorney who advocates for Medicare patients, said he has seen “more frequent” and “inappropriate” denials of insurance claims this year. The changes coincide with the adoption of AI by health insurance companies to determine coverage for Medicare patients, he said.
“In our experience, using these algorithmic tools has resulted in more denials or premature termination of coverage for things that would otherwise have been covered,” Lipschutz said.
In 2021, insurers turned down almost one in five claims they received compared to a few years earlier, according to KKF.
Still, it’s impossible to know whether insurers’ AI tools are directly responsible for the increase in denied claims, according to Lipschutz. Because insurance companies are not required by law to disclose the reasons behind their coverage decisions, publicly available data on insurers’ claim review processes is sparse, making it difficult to determine the reasons for denials, he said.
Quick rejection
Cindy Cardinal, a North Carolina retiree who cares for her eighty-year-old father, has spent more than a year fighting various claim denials from United Healthcare, the insurance company that offers her father’s Medicare Advantage plan.
The first battle began when Cardinal’s father broke his hip, forcing him to undergo emergency hip replacement surgery. After the surgery, a doctor recommended that he be admitted to an intensive inpatient rehabilitation program to help him regain his mobility.
The program will cost you $1,800 a day out of pocket — about the same price as the average mortgage payment in the state of North Carolina.
Cardinal said the answer to her father’s claim came within minutes: United Healthcare wouldn’t pay the bill.
The insurer did not provide any information about how it decided it would not cover the care prescribed by her father’s doctor, she said.
Legal battles lag behind technology
Lipschutz said the lawsuit against UnitedHealthcare and Humana could accelerate efforts to regulate the implementation of AI 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’s] I hope this type of inappropriate behavior will subside,” he said.
Cardinal’s father moved into her home last week. She said she has recently been struggling to get coverage for her father’s physical therapy sessions, sometimes spending hours on the phone with United Healthcare. Her father’s doctor also recommended palliative care. Cardinal expects to struggle for coverage for this one as well.
