The alleged use of artificial intelligence for prior authorization and claim denials has led to lawsuits against two major health insurance companies.
UnitedHealth Group and Cigna have been separately accused of allegedly using automated tools to deny some claims, which plaintiffs say reduces the insurers' labor costs. Both policymakers and physician leaders are asking insurance companies to open up their AI playbooks in response to these allegations.
Update: Latest Medicare Advantage AI lawsuit targets Humana
The allegations come as more insurers are interested in using AI to automate their claims processing capabilities. On July 13, Health Care Service Corp. said it was expanding a pilot integration of AI into its prior authorization process, which the parent of Blue Cross & Blue Shield of Illinois promises will make the approval process for many procedures quicker and easier for providers and patients alike. Insurers say this kind of technology can help predict the necessity of care, expediate physician reimbursement and reduce fraud.
What does the suit allege UnitedHealthcare is doing?
UnitedHealth Group faces a potential class-action lawsuit, filed Nov. 14 in U.S. District Court for the District of Minnesota. The plaintiffs, family members of two deceased Medicare Advantage enrollees, aim to represent a national class of similarly affected enrollees. They allege the insurer has used its AI tool, “nH Predict,” to predict how much care a patient should need. In the process, the plaintiffs allege UnitedHealth is using the technology to override physicians' decisions while denying post-acute care.
The plaintiffs claim the insurer knew the AI tool had a 90% error rate but expected only a fraction of policyholders to appeal the denied claims. The lawsuit alleges that the health insurance company breached its contracts with members, which resulted in unjust enrichment under federal law. The complainants also claim that UnitedHealthcare violated state laws in more than 20 jurisdictions.
The complaint targeting UnitedHealth alleges that the late Gene Lokken and the late Dale Tetzloff, both of Wisconsin, failed to receive appropriate coverage for care following major medical incidents. The plaintiffs seek monetary damages, according to the suit.
What did UnitedHealth say in response?
In an emailed statement, UnitedHealth Group said the AI tool is not used to make coverage decisions
“The tool is used as a guide to help us inform providers, families and other caregivers about what sort of assistance and care the patient may need both in the facility and after returning home. Coverage decisions are based on [Centers for Medicare and Medicaid Services] coverage criteria and the terms of the member’s plan. This lawsuit has no merit, and we will defend ourselves vigorously,” a spokesperson wrote.
The plaintiffs are represented by law firms Lockridge Grindal Nauen and the Clarkson Law Firm.
What is Cigna alleged of doing?
In a similar complaint filed against Cigna in California, a member alleges the insurer leveraged an algorithm to improperly deny claims and systematically shift costs to its 2.1 million Golden State members. The member, enrollee Suzanne Kisting-Leung, alleges Cigna created its procedure-to-diagnosis, or PxDx review process, to improperly deny claims, sometimes hundreds or thousands at a time.
The lawsuit, filed on July 25 in the U.S. District Court for the Eastern District of California, also seeks class action status. It followed a March report from news agency ProPublica that said Cigna’s medical staff rely on the process to deny large batches of claims without reviewing the medical necessity of each case.
The plaintiff is seeking monetary damages and an injunction for the health insurance company to stop using PxDx in claims management. A previous enrollee, Ayesha Smiley, was removed from the case in October. Clarkson Law Firm, which is representing the plaintiff in the Cigna suit as well, did not immediately respond to an inquiry as to why Smiley was removed.
