The goal of the lawsuits is to get health insurance companies to use an artificial intelligence tool to process claims

The growing use of artificial intelligence in the health insurance industry is facing mounting legal challenges as patients claim that insurers are using the technology to unjustifiably deny coverage for essential medical services.

Complaints against health insurers United Healthcare and Humana have raised fears that the integration of artificial intelligence into the health insurance sector will increase claims denials, preventing chronically ill and elderly patients from receiving quality medical care. A rash of coverage denials is fueling calls for more government oversight of the health insurance industry’s largely unregulated use of artificial intelligence, experts told CBS MoneyWatch.

The class-action lawsuit, filed Dec. 12, alleges that health insurer Humana used an artificial intelligence model called nHPredict to unjustifiably deny medically necessary care to elderly and disabled people covered by Medicare Advantage. This is a Medicare-approved plan run by private insurance companies. Another lawsuit filed last month also involves United Healthcare used nHPredict to reject claimseven though we knew that about 90% of the tools denied coverage were defective, exceeding the patients’ doctors’ estimates that the expenses were medically necessary.

A Humana spokesperson said the company uses “a variety of tools, including augmented intelligence, to expedite and approve access management requests” and “retains a ‘human loop’ of 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.

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

But recent lawsuits challenge that last claim, claiming that “the nH Predict AI model determines coverage criteria for Medicare Advantage patients in post-acute care settings using rigid and unrealistic recovery predictions.” Both United Healthcare and Humana are accused of implementing policies to ensure that coverage determinations are made based on the results of nHPredicts’ algorithmic decision-making.

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Humana’s “employees who deviate from the predictions of the nH Predict AI model are penalized and fired, regardless of whether the patient needs more care,” one lawsuit states.

Likewise, United Healthcare “strangulated and fired” employees who deviated from nH Predict guidelines, “regardless of whether the patient demanded[d] more diligence,” according to the lawsuit filed 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 “increased” and “inappropriate” denials of insurance claims this year. The changes coincide with the adoption of artificial intelligence by health insurers to determine coverage for Medicare patients, he said.

“In our experience, the use of these algorithmic tools has resulted in more denials or premature termination of coverage for matters that would otherwise have been covered,” Lipschutz said.

In 2021, according to KKF, insurers denied almost every fifth claim they received, more than a year earlier.

However, according to Lipschutz, it is impossible to know whether Insurers’ AI tools are directly responsible for the increase in claim denials. Because insurers are not required by law to disclose the reasons for their coverage decisions, publicly available information about insurers’ claims-handling processes is scarce, making it difficult to determine denials, he said.

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Cindy Cardinal, a retiree in North Carolina who cares for her eighty-year-old father, has spent more than a year fighting various reimbursement denials from United Healthcare, the insurance company that offers her father’s Medicare Advantage plan.

The first fight started when Cardinal’s father broke his hip, forcing him to undergo emergency hip replacement surgery. After the surgery, the doctor recommended that he be admitted to an intensive inpatient rehabilitation program so that he could regain his mobility.

The program would cost $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 won’t pay the bill.

The insurance company did not provide information on how it decided not to cover the treatment prescribed by her father’s doctor, she said.

Lipschutz said the lawsuits against UnitedHealthcare and Humana could speed up efforts to regulate the application of artificial intelligence technology in the health insurance industry, although a resolution to the current battles would not come for several years.

“Through litigation, legislation, and the common law court… [there’s] I hope this type of inappropriate behavior goes away,” he said.

Last week, Cardinal’s father moved into his home. She said she has recently been fighting to get 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. The Cardinal expect to struggle in coverage as well.

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