Dive Brief:
- Humana is the latest insurer to be sued over its use of artificial intelligence in claims processing, with a lawsuit alleging the payer used AI model nH Predict to improperly deny care to elderly Medicare Advantage patients.
- In a class action lawsuit filed Tuesday, plaintiffs argued the payer prematurely cut payments for MA beneficiaries’ rehabilitation care. According to the suit, Humana based the cuts on the AI model’s “rigid and unrealistic predictions for recovery” — not doctors’ recommendations — despite knowing the model’s estimations were often “highly inaccurate.”
- The lawsuit comes on the heels of another suit filed by the same legal team last month against UnitedHealth and nH’s owner, NaviHealth.
Dive Insight:
Humana and UnitedHealth are among the top providers of the popular plans for seniors and account for nearly half of all MA enrollees nationwide, according to a 2023 analysis from KFF.
Humana alone provides MA health insurance plans for 5.1 million eligible Americans, according to the lawsuit filed this week in the U.S. District Court in Western Kentucky.
Insurers’ use of AI algorithms in claims processing has recently come under fire, as critics say the technology helps insurers deny claims.
In July, a lawsuit was filed against Cigna in California alleging the insurer used an algorithm to review and reject claims en masse, instead of reviewing each claim individually. A previous lawsuit filed against UnitedHealthcare by TeamHealth last year alleged the insurer used an algorithm to routinely deny claims based on diagnostic codes.
The Humana lawsuit targets the AI algorithm, nH Predict, which is designed to predict how long patients will stay in skilled nursing facilities. The insurer stakes claims approvals and denials off of the model’s estimates, according to the suit filed this week.
However, the lawsuit alleges the algorithm has a high error rate and often contradicts doctors’ recommendations.
In some cases, patients depleted their savings to afford care after claims were denied. Others were forced to end care prematurely or forgo it entirely, according to the lawsuit.
The lawsuit also accuses Humana of banking on beneficiaries not appealing denials. Roughly 2% of Humana policyholders appeal denied claims, according to the lawsuit.
Humana did not respond to requests for comment by press time.
Research has found that prior authorization — where payers green light certain medications or non-emergency medical procedures prior to service — can be used to deny coverage in MA plans.
Widespread concern about coverage determinations in MA caused the CMS to crack down on MA plan coverage determinations this spring, issuing a rule to bring coverage in line with traditional Medicare.
