Lawsuit Alleges Humana Used AI to Deny Medically Necessary Claims

Humana is facing a class action lawsuit alleging that the payer used an artificial intelligence (AI) tool to deny Medicare Advantage beneficiaries’ claims for medically necessary care.

In a complaint filed in the US District Court for the Western District of Kentucky, the plaintiffs said Humana continues to use naviHealth’s nH Predict AI Model to determine coverage determinations even though the payer is aware the tool is inaccurate and not based on patients’ medical needs.

Rather than considering physicians’ determinations and individual care needs, Humana relied on the AI algorithm to determine Medicare Advantage beneficiaries’ coverage criteria in post-acute care settings, according to the complaint. The AI model predicted how much care an elderly patient should require and did not incorporate reports from physicians detailing how much care a patient needed to recover.

The model’s predictions led to the inappropriate denial of necessary care ordered by beneficiaries’ doctors, the plaintiffs alleged.

Humana limits its employees from deviating from the model’s results by collaborating with naviHealth to set targets to keep stays at post-acute care facilities within 1 percent of the days projected by the model, the lawsuit stated. Employees who do not follow the AI model projections are disciplined and terminated.

According to the plaintiffs, Humana continues to use the AI model to deny claims because it knows that very few policyholders will appeal the denied claims, while the majority will pay the costs out of pocket or forgo the rest of their care.

“Humana banks on the patients’ impaired conditions, lack of knowledge, and lack of resources to appeal the wrongful AI-powered decisions,” they wrote.

Additionally, the plaintiffs said Humana benefits financially by using the AI model because the payer receives policy premiums without paying for care it should be obligated to cover. By denying claims, Humana is also saving labor costs associated with paying doctors to conduct manual reviews of claims.

Meanwhile, elderly beneficiaries have been prematurely discharged from care facilities and have been forced to spend money out of pocket to continue receiving necessary care, the lawsuit alleged.

Coverage denial letters from Humana stated that coverage for beneficiaries who qualify for Medicare was denied solely due to their Medicare eligibility, with the payer directing them to enroll in the public program.

“By engaging in this misconduct, Humana breached its fiduciary duties, including the duties of good faith and fair dealing, because its conduct serves Humana’s own economic self-interest and elevates Humana’s interests above the interests of the insureds,” the complaint read.

Humana does not comment on pending litigation, but a spokesperson for the payer shared a statement on its use of AI and augmented intelligence.

"At Humana, we use various tools, including augmented intelligence, to expedite and approve utilization management requests and ensure that patients receive high-quality, safe and efficient care," the Humana spokesperson told HealthPayerIntelligence via email.

"By definition, augmented intelligence maintains a ‘human in the loop’ decision-making whenever AI is utilized. Coverage decisions are made based on the health care needs of patients, medical judgment from doctors and clinicians, and guidelines put in place by CMS. It’s important to note that adverse coverage decisions are only made by physician medical directors."

The plaintiffs are seeking damages and an order prohibiting Humana from continuing to use the AI algorithm.

Humana is not the first payer to face legal action for using the nH Predict AI Model. In November, a class action complaint was filed against UnitedHealth Group, alleging that the payer used the AI model in the same way as Humana to deny medically necessary claims.

naviHealth, the creator of the AI model, is owned by UnitedHealth Group’s Optum, although the companies announced in October that they would discontinue the naviHealth name amid congressional scrutiny.