Humana must face a class action lawsuit claiming to use artificial intelligence to deny act actute care to Medicaid Advantage beneficiaries when automated decisions supersede clinician interpretations.
Judge Rebecca Grady Jennings of the U.S. District Court for the Western District of Kentucky on Friday held that plaintiffs do not need to exhaust their Medicare administrative appeals before filing a complaint in late 2023.
In March, Humana asked the court to dismiss these claims. Initially, the two women behind the lawsuit did not ask the quality improvement organization to consider refusing to compensate, which in turn argued that the district court had no jurisdiction.
However, the judge found that repeated denials by the country's second largest MA insurance company would irreparable harm to the plaintiffs, as only two options remain to wait for appeal. Or repeat care while waiting for a decision.
That, Jennings said, allowed her to abandon the fatigue requirement of the appeal. She cited the example of plaintiff Sharon Merkley who received seven rejections for the same care within 30 days. When Merckley had to return to hospital a month later, she alleged that Humana issued five more refusals for acute care, even after successful appeal.
“Class members have forgotten the medically necessary care that will result in hospital admission or additional treatment,” Jennings writes. “These medical setbacks cannot be improved by retroactive benefits or the ultimate success of appeal.”
The case predicts coverage decisions will be made, focusing on Humana's prediction of NH use. This said the plaintiffs had a false denial of the claim that previous beneficiaries have rarely ever sue them.
The plaintiff's lawyer alleged that Humana “misunderstood the insurance and misunderstood the health plan to individually assess his claims and believe in paying medically necessary care.”
“Not good”
When they tried to use the appeal process, Humana often overturned their own decisions or allowed administrative law judges to do so. Still, the lawyers argued that Humana would start the same negative cycle again.
Jennings agreed that enforcing plaintiffs to appeal would have been in vain to evade the appeal, citing the plaintiffs that “humara will abusive and undermine the administrative review process so that the act is repeated while avoiding review.”
She argued that Humana rejects patients the outcome or rationale for NH, predicts decision-making, leaving no way to understand why the service was denied.
“There is no way to challenge the systematic process that leads to individual patients' rejection [by nH Predict]”Even if the plaintiff is successful in the QIO appeal, “Humana and its contractor Navihealth will update their medical records, issue another denial, and force patients to resume the appeal process.” …and if a patient poses to an administrative law judge after the QIOS process, Humana agrees to pay the claim and therefore bypasses scrutiny of NH's predictive AI model. ”
Contract Disputes
Ultimately, the previous court question, writing that Jennings wrote, is not whether Humana violated Medicare Act by refusing to give benefits. It is whether the company intentionally violated its contract with the beneficiary and maintained its revenue.
Plaintiffs argue that if they knew about the humana pattern of delegating the legally necessary review process to NH forecasts, they chose a different insurance company.
“The plaintiffs believed that the premiums were paying for the individualized valuation rather than the AI assessment,” wrote Jennings, allowing the pursuit of a class of injunction and declaration relief to advance. “This remedy seeks to prohibit humana from “continuing inappropriate and illegal claim processing practices.” This relief attempts to ensure that claims are assessed individually by a medical professional rather than by an artificial intelligence.
Jennings has expressed claims against breach of contract, violation of integrity and fair dealings, unfair enrichment and common law fraud.
However, she dismissed four other claims regarding claim settlements, unfair competition, malicious insurance and unfair and deceptive insurance practices as federal law preceded state law in these areas.
The class action seeks actual, statutory, punitive damages, mental distress, and orders prohibiting Humana from continuing its AI-compliant claim processing practices.
