US Health Insurers Face Pressure Over AI Role in Claim Decisions
TL;DR
- Class action lawsuits are targeting health insurers like UnitedHealth and Humana over the use of AI technologies in claims processing.
- Critics claim that AI algorithms, particularly nH Predict, lead to unjust denials of medically necessary care.
- Growing concerns over the opacity of AI's decision-making are prompting calls for increased regulatory oversight.
- Recent government guidelines stress the need for human intervention in healthcare decisions influenced by algorithms.
In recent years, the evolution of artificial intelligence (AI) tools in the healthcare sector has been met with both enthusiasm for its potential and concern about its impact on patient care, particularly regarding health insurance claim decisions. Significant scrutiny now falls on US health insurers that are increasingly relying on AI algorithms to manage claims and determine coverage for essential medical services.
Class Action Lawsuits and AI's Role in Healthcare
A growing number of class action lawsuits are challenging the practices of major health insurers, including UnitedHealth and Humana, alleging that their use of AI technologies has resulted in significant coverage denials for patients. One particularly contentious algorithm, known as nH Predict, developed by UnitedHealth's subsidiary, NaviHealth, has been cited repeatedly in these lawsuits. Critics claim that nH Predict has lead to a staggering 90% error rate in its coverage determinations, often overriding physicians' recommendations despite high stakes in patient care[^1] [^5].
For instance, lawsuits stemming from the case of 91-year-old Gene Lokken reveal how AI can dictate the terms of treatment. After Lokken's fall and subsequent hospital care, his claims for ongoing rehabilitation were denied by his health insurer, resulting in his family facing over $12,000 a month in bills[^3]. These incidents underscore broader fears regarding the capacity of AI algorithms to assess individual patient needs accurately and compassionately.
AI in Action: The Mechanisms Behind Denials
AI's integration into claims processing can lead to rapid decision-making, but this often comes at the expense of thoroughness. The lawsuits assert that claims are denied in mere seconds, leveraging automated systems that do not fully take into account the unique circumstances of each patient. According to the investigation, nearly one in five claims was denied in 2021[^5]. This alarming trend aligns with findings from the Journal of the American Medical Association, noting that algorithmic decision-making may exacerbate issues of administrative opacity, leaving patients and healthcare providers in the dark about the rationale behind denial decisions[^4].
In response to mounting pressure, health insurers argue that claims are decided not solely by algorithms, but with human oversight. UnitedHealth contends that only 0.5% of claims are rejected based on clinical evidence, attributing denials to administrative errors more than AI decision-making[^3]. Despite these assertions, expert opinions suggest that reliance on algorithmic recommendations could dilute the role of professionals who are privy to the nuances of patient care.
Regulatory Response and Future Implications
In light of these challenges, the US federal government has initiated measures to regulate AI’s increasing role in healthcare. The Centers for Medicare & Medicaid Services (CMS) has introduced guidance mandating that Medicare Advantage plans base their coverage decisions on the specific circumstances of individuals rather than relying exclusively on algorithms[^3]. Such regulations underscore a critical need for transparency and human oversight, particularly as the healthcare landscape evolves with technological advancements.
Additionally, legislative discussions are likely to intensify as the prevalence of AI in healthcare raises ethical and practical questions about its implications for patient care. As experts highlight, a further overhaul of the healthcare system might be necessary to address underlying issues such as inflated costs and equity in access to care[^5].
Conclusion
The rise of AI in health insurance claims processing presents a complex landscape that intertwines technological advancement with deep ethical concerns and patient welfare. As lawsuits mount and regulatory scrutiny intensifies, the conversation around AI's effectiveness, reliability, and fairness in healthcare is more crucial than ever. The outcome of these legal challenges could pave the way for significant shifts in how insurers utilize technology in decision-making processes, potentially fostering a more equitable healthcare environment.
References
[^1]: Mello MM, Rose S. (2024). "Denial—Artificial Intelligence Tools and Health Insurance Coverage Decisions". JAMA Health Forum. Retrieved October 2023. [^2]: "Lawsuits take aim at use of AI tool by health insurance companies to process claims". (2023). CBS News. Retrieved October 2023. [^3]: Jack A. (2025). "Health claim disputes fuel debate on role of AI in directing care". Financial Times. Retrieved October 2023. [^4]: "AI tool counters health insurance denials decided by automated algorithms". (2025). The Guardian. Retrieved October 2023. [^5]: "Deloitte: Insurers Race to Deploy AI Amid Profit Pressures". (2024). InsurTech Digital. Retrieved October 2023.
Metadata:
Keywords: AI in healthcare, health insurance, claims denials, UnitedHealth, Humana, nH Predict, regulation, Medicare Advantage.
