Humana Faces Class-Action Lawsuit for Misuse of Algorithm in Medicare Advantage Plans

Class-Action Lawsuit Against Humana

Humana, the health insurance giant, is facing a class-action lawsuit filed by Medicare Advantage beneficiaries. The lawsuit alleges that Humana illegally used an algorithm, known as nH Predict, to prematurely terminate payment for rehabilitation care. This action was taken after patients had suffered serious illnesses and injuries, and desperately needed ongoing care.

The Role of nH Predict Algorithm

The nH Predict algorithm is at the center of this controversy. It has been accused of being instrumental in a fraudulent scheme to deny claims to seriously ill patients. The lawsuit argues that Humana's reliance on this algorithm, instead of medical professionals' assessments, led to the premature cessation of rehab care. This has forced many patients to either abandon their treatment or incur thousands of dollars in out-of-pocket expenses.

Humana's Use of AI in Denying Care

Besides the premature termination of rehab care, Humana is also accused of using artificial intelligence (AI) to deny elderly patients the care they were owed under their Medicare Advantage Plans. The AI was allegedly used to override doctors' recommendations, resulting in a lack of necessary care for elderly patients. Despite claims that the AI model used by Humana renders highly inaccurate predictions, the insurer has continued to use it to deny claims.

Humana's Legal Battles and Medicare Overcharges

The current lawsuit isn’t the first legal battle involving Humana and Medicare Advantage. In an unrelated case, Humana sued the U.S. government over a Biden administration policy that could allow Medicare to reclaim billions of dollars from insurers for overcharges. The policy allows the government to recoup payments when audits uncover charges for diagnoses not found in patients' medical records. While the administration believes this could help collect as much as $4.7 billion over 10 years, Humana deems the rule 'arbitrary and capricious' and argues that it poses unpredictable consequences for Medicare Advantage organizations.

Medicare Advantage Overpayments and Audits

Overcharges in Medicare Advantage plans are a significant issue. Office of Inspector General (OIG) audits have found over $213 million in estimated Medicare Advantage overpayments in 2023 alone. Between April and September 2023, the agency issued 65 audits, expecting to recover $82.7 million. HumanaChoice, among other plans, was audited and found to have received significant overpayments in previous years.

Implications of Humana's Actions

Humana's alleged actions have far-reaching implications, especially for elderly patients who are most in need of continuous, reliable care. The use of an inaccurate AI model to deny claims and the premature termination of rehab care using an algorithm can potentially disrupt the essential care that these patients need. Moreover, it raises questions about the ethical use of AI in health care and the need for stringent regulations to safeguard patients' interests.