Humana has asked a federal court to dismiss a class action lawsuit alleging the Medicare Advantage insurer made coverage determinations using artificial intelligence over medical review.
In addition to calling the claims false, Humana’s attorneys said in a filing last week that the two women who brought the suit should have to use all administrative appeal options first. The company’s attorneys argued that the US District Court for the Western District of Kentucky has no jurisdiction.
“Under the Medicare Act and Centers for Medicare and Medicaid Services regulations, any Medicare beneficiary who disagrees with a benefit determination by her MAO must exhaust a four-step mandatory administrative review process that concludes with potential review by the Medicare Appeals Council,” the motion states.
“If a member disagrees with the Medicare Appeals Council’s determination on behalf of the Secretary of HHS, she can seek relief in federal court by filing a lawsuit against the Secretary of HHS challenging the outcome of the agency’s administrative determination,” Humana continued. “She cannot sue her MAO.”
The suit was one of two federal cases filed late last year challenging the use of artificial intelligence and algorithms to deny or cut off care.
In the Humana case, plaintiffs Joanne Barrows and Susan Hagood each claimed their MA plan canceled coverage of skilled nursing services. Barrows was admitted to Good Samaritan Society Ambassador Rehabilitation Facility in Minnesota in late 2021. After two weeks of care, Humana said it would stop coverage.
In 2022, Hagood was admitted to a SNF and then readmitted to Mission Hospital. During her stay there, she was notified she would no longer be eligible for SNF services because she “did not require the level of care provided by a SNF.”
Denial strategies targeted
The lawsuit alleged that Humana relies on it nH Predict AI Model to make such decisions despite knowing they “are highly inaccurate and are not based on patients’ medical needs but continues to use this system to deny patients’ coverage.”
Consumer and clinician frustration with insurers’ use of decision-making AI tools has mounted in recent years, drawing scrutiny from both CMS and Congress. Nursing home care is often cut off long before a provider would recommend the patient go home or stop rehab therapy, providers have said.
Humana in its motion to dismiss filed Wednesday characterized those claims as “false” and “sensationalized,” calling the lawsuit tantamount to venue shopping. Its chief argument for dismissal was the fact that the plaintiffs are seeking “to sidestep the exclusive administrative appeal process set by the Medicare Act.”
Hagood received an adverse decision from a HHS administrative law judge denying her appeal and upholding Humana’s Medicare coverage determination. Barrows’ appeal was denied by an independent Quality Improvement Organization in the first appeal stage.
Humana spent little time responding to the allegations in its motion. Instead, the company argued that the lawsuit is built on a series of state claims that shouldn’t be before a federal court. It cited a similar case that was dismissed by the Sixth Circuit last year.
“Humana’s coverage determinations are not governed by state law. Instead, Humana is subject to ‘extensive regulations’ by CMS,” the insurer argued. “Allowing this case to continue would require the Court to apply twenty-three states’ standards, and risk outcomes that conflict with the federal government’s Medicare rules,” Humana wrote. “This is exactly why the Medicare Act has such a vast preemption provision.”
