Class Actions Spotlight AI-Assisted Payer Denials

As well being care payers more and more depend on synthetic intelligence (“AI”) to hurry up affected person declare adjudication and prior-authorization determinations, suppliers must be looking out for algorithms designed to disclaim claims with minimal
human oversight. Two putative class motion lawsuits filed in opposition to Cigna and UnitedHealth in November 2023 allege that the payers’ respective AI fashions, “PxDx” and “nH Predict,” have been used rather than actual medical professionals
to wrongfully deny medically obligatory care.

The lawsuit in opposition to Cigna alleges that Cigna makes use of its PxDx (procedure-to-diagnosis) algorithm to robotically evaluate claims with out conducting a radical medical evaluate of the claims as required by regulation and contract. [1] The lawsuit alleges that over a interval of two months in 2022, for instance, Cigna used PxDx to robotically evaluate and deny over 300,000 claims, spending a mean of simply 1.2 second per declare.
[2] Regardless of insurance coverage legal guidelines and rules in lots of states requiring physicians to evaluate claims earlier than payers might deny them on the premise of medical necessity, the
lawsuit means that physicians employed by payers to evaluate insurance coverage claims (usually referred to as “medical administrators”) are signing off on denials with out even taking a look at them.

The swimsuit in opposition to UnitedHealthcare is particular to Medicare Benefit plans. It alleges that UnitedHealth’s AI mannequin, nH Predict, has a identified 90% error price and denies claims by forcing unrealistic expectations of Medicare Benefit sufferers’
restoration in post-acute care settings. The algorithm overrides the opinions of actual life treating physicians who deemed the underlying care was medically obligatory.[3] 

Each lawsuits depend on solely a small proportion of sufferers interesting wrongfully denied claims. Certainly, the place solely about 0.2% of policyholders attraction denied claims, the bulk will find yourself paying out-of-pocket prices or forgoing the rest of prescribed
post-acute care. [4] In Medicare Benefit circumstances particularly, this may imply the aged are pressured out of care amenities or should deplete their financial savings to proceed
receiving medically obligatory care the place an algorithm has disagreed with their treating doctor.

Not solely are these algorithms getting used to disclaim claims, additionally they are getting used to vary human habits. The UnitedHealthcare swimsuit alleges that the defendants have arrange worker targets as a way to hold expert nursing facility stays inside 1% of
the times projected by nH Predict, and that “[e]mployees who deviate from the nH Predict AI Mannequin projections are disciplined and terminated, no matter whether or not a affected person requires extra care.” [5]

Whereas this habits is regarding, sufferers and suppliers alike have recourse by way of interesting claims and by proactively searching for to barter contracts with payers to ban these practices. Suppliers may additionally have already got agreements in place that
permit for suppliers to hunt recourse by way of litigation in opposition to the payer for such use of AI. Thompson Coburn’s Well being Care Group has a crew of attorneys accessible to help with these points.