The growing use of artificial intelligence by the health insurance industry faces mounting legal challenges, with patients claiming that insurers are using the technology to wrongly deny coverage for essential medical services.
The complaints, which take aim at health insurers United Healthcare and Humana, have sparked fears that AI's integration in the health insurance sector will drive up coverage claims denials, preventing chronically ill and elderly patients from receiving quality medical care. A rash of coverage rejections is fueling calls to increase government oversight of the largely unregulated use of AI by the health insurance industry, experts told CBS MoneyWatch.
A class-action lawsuit, filed on December 12, alleges that health insurer Humana used an AI model called nHPredict to wrongfully deny medically necessary care for elderly and disabled patients covered under Medicare Advantage — a Medicare-approved plan run by private insurers. Another lawsuit, filed last month, alleges United Healthcare also used nHPredict to reject claims, despite knowing that roughly 90% of the tools denials on coverage were faulty, overriding determinations by patient physicians that the expenses were medically necessary.
A Humana spokesperson said the company uses "various tools, including augmented intelligence to expedite and approve utilization management requests," and"maintains a 'human in the loop' decision-making whenever AI is utilized." The spokesperson added that Humana does not comment on pending litigation.
United Healthcare did not reply to CBS MoneyWatch's request for comment.
NHPredicts is a computer program created by NaviHealth, a subsidiary of United Heathcare, that develops personalized care recommendations for ill 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 to make coverage determinations."
But recent litigation is challenging that last claim, alleging that the "nH Predict AI Model determines Medicare Advantage patients' coverage criteria in post-acute care settings with rigid and unrealistic predictions for recovery." Both United Healthcare and Humana are being accused of instituting policies to ensure that coverage determinations are made based on output from nHPredicts' algorithmic decision-making.
Humana "employees who deviate from the nH Predict AI Model projections are disciplined and terminated, regardless of whether a patient requires more care," one lawsuit states.
Similarly, United Healthcare "disciplined and terminated" employees who strayed from nH Predict guidelines, "regardless of whether a patient require[d] more care," according to a lawsuit against the insurer.
NaviHealth did not respond to CBS MoneyWatch's request for comment.
David Lipschutz, a lawyer who advocates for Medicare patients, said he's seen "more frequent" and "inappropriate" insurance claim denials 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, the use of these algorithmic tools has led to more denials, or premature terminations of coverage for things that otherwise would be covered," Lipschutz said.
In 2021, insurers denied nearly one in five claims they received, up from several years earlier, according to KKF.
Still, it's impossible to know whether insurers' AI tools are directly responsible for the rise in claim rejections, according to Lipschutz. As insurance companies aren't legally required to disclose the reasons behind their coverage decisions, publicly available data on insurers' claims reviews processes is scant, making it difficult to determine what's driving up denials, he said.
Cindy Cardinal, a retiree in North Carolina who cares for her octogenarian 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 tussle began when Cardinal's father broke his hip, forcing him to undergo an emergency hip-replacement surgery. After the operation, a doctor recommended he be admitted to an intensive inpatient rehabilitation program to help him regain his mobility.
The program would cost $1,800 a day out of pocket — about the same cost as the average mortgage payment in the state of North Carolina.
Cardinal said a response to her father's claim arrived within minutes: United Healthcare wouldn't foot the bill.
The insurer did not provide any information on how it decided it wouldn't cover the care ordered by her father's physician, she said.
Lipschutz said litigation against UnitedHealthcare and Humana could accelerate efforts to regulate the application of AI technology within the health insurance industry, even if a resolution to current battles doesn't come for several years,
"Through litigation, legislation and the court of public opinion… [there's] hope that these types of inappropriate behaviors will subside," he said.
Last week, Cardinal's father moved into her home. She said she has recently been fighting for coverage for her father's physical therapy sessions, sometimes spending hours on the phone with United Healthcare. Her father's doctor has also just recommended palliative care. Cardinal is anticipating having to fight for coverage for that as well.
Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News' BizTech Unit and worked on the Associated Press' web scraping team.
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