Lawsuits reveal how health insurers use AI to deny care against doctors’ advice

Lawsuits against major health insurers are shining a spotlight on the ethical challenges of deploying AI to make healthcare decisions. Several class action lawsuits, including one involving the family of 91-year-old Gene Lokken, allege that companies like UnitedHealth have used AI algorithms to override physicians’ recommendations and deny coverage—often with devastating financial and personal consequences for patients. This controversy highlights a critical tension in healthcare’s AI revolution: while artificial intelligence promises benefits in diagnosis and drug development, its application in determining patient care is raising serious questions about algorithmic accountability and appropriate human oversight.

The big picture: Major health insurers stand accused of using AI systems to systematically deny care coverage despite contradicting medical professionals’ recommendations.

• Gene Lokken’s family faced bills exceeding $12,000 monthly after UnitedHealth denied continued nursing home coverage following his leg and ankle fractures, despite his doctor’s recommendations.
• His case forms part of several class action lawsuits and investigations targeting how insurers implement AI in coverage decisions.

Key details: UnitedHealth, America’s largest insurer covering 53 million people, is at the center of criticism for its algorithmic approach to care decisions.

• The company owns and markets “nH Predict,” an AI model developed by its subsidiary NaviHealth that determines appropriate duration of post-acute care.
• Litigants claim the system inaccurately calculated reimbursement periods and restricted employees’ ability to override these algorithmic determinations.

Why this matters: The controversy represents one of the first major legal challenges to AI-powered healthcare decision-making that directly impacts patient outcomes.

• These cases highlight tension between technology’s promise to improve healthcare efficiency and the risk of algorithmic systems overriding human medical judgment.
• The outcomes could establish important precedents for how AI systems are regulated and implemented in healthcare settings.

Industry context: UnitedHealth faces particular scrutiny following recent corporate tragedy.

• The criticism comes at a sensitive time for UnitedHealth following the December killing of Brian Thompson, chief executive of its UnitedHealthcare division.
• Other major insurers like Humana face similar allegations regarding algorithmic care decisions.

The legal landscape: These class action lawsuits represent early tests of accountability for algorithmic healthcare decisions.

• The cases center on whether AI systems inappropriately replaced or restricted human judgment in determining necessary medical care.
• The litigation outcomes could shape how insurers implement AI tools in coverage determination processes going forward.