Major health insurance company faces disturbing allegations of 'fraudulent scheme'

Health insurance company Humana is being accused of allegedly wrongfully denying care to elderly patients, who are enrolled in Medicare Advantage Plans, using an augmented intelligence model "to override" physicians' orders on "necessary care patients require," according to a new lawsuit.

The lawsuit, filed by two Humana Medicare Advantage Plan customers on Dec. 12 in Kentucky, claims that Humana uses an AI model called nH Predict, and it allegedly has a high error rate. And allegedly, despite knowing that it's inaccurate, the company still uses it.

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"Despite the high rate of wrongful denials, Humana continues to systemically use this flawed AI Model to deny claims because they know that only a tiny minority of policyholders (roughly 0.2%) will appeal denied claims, and the vast majority will either pay out-of-pocket costs or forgo the remainder of their prescribed post-acute care," reads the lawsuit. "Humana banks on the patients' impaired conditions, lack of knowledge, and lack of resources to appeal the wrongful AI-powered decisions."

The lawsuit alleges that the AI model "prematurely and in bad faith" ceases payment for health care services for elderly people with "serious diseases and injuries." As a result, patients are left with an "overwhelming" amount of medical debt.

"The fraudulent scheme affords Humana a clear financial windfall in the form of policy premiums without having to pay for promised care, while the elderly are prematurely kicked out of care facilities nationwide, forced to deplete family savings to continue receiving necessary medical care, or forced to forgo care altogether, all because an AI Model 'disagrees' with their real live doctors' determinations," reads the lawsuit.

Employees at Humana are also allegedly limited by the company on when they can deviate from the AI model. The lawsuit claims that the company collaborates with NaviHealth to "set targets to keep stays at post-acute care facilities within 1% of the days projected by the AI Model." Employees who go against that AI model's predictions are allegedly terminated.

In an emailed statement to TheStreet, a spokesperson for Humana, who declined to comment on the lawsuit, said that the company uses various tools, including AI, to "expedite and approve utilization management requests."

"By definition, augmented intelligence maintains a 'human in the loop' decision-making whenever AI is utilized." said the spokesperson for Humana. "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 Kentucky-based health insurance giant isn't the first health care company to face a lawsuit over its use of AI model nH Predict. Last month, a lawsuit against UnitedHealthCare and NaviHealth was filed due to allegations of United using the same AI tool to allegedly deny elderly patients rehabilitative care.

Despite the widespread availability of Medicare, older adults in America face "significant financial barriers" when it comes to receiving health care, according to a 2021 international Commonwealth Fund survey.

The survey found that American older adults were more likely to postpone or decline health care because of the cost compared to older adults in other countries that were surveyed.

About 1 in 12 of American respondents either "postponed or did not seek a consultation about their medical problem or get a recommended medical test, treatment, or follow-up examination" due to high out-of-pocket costs for health care.

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