AI Litigation Insights

Health insurer Humana was sued in a class action challenging the process by which it made claim determinations and alleging that it knowingly used a “highly inaccurate” artificial intelligence model, nH Predict, to improperly deny elderly patients coverage for care under their Medicare Advantage plans. Plaintiffs claim that the use of nH Predict caused an “enormous increase in the number of coverage denial appeals” and that those appeals were successful 90% of the time. The case was initially filed on December 12, 2023, in the US District Court for the Western District of Kentucky. Plaintiffs filed an amended complaint on April 22, 2024. Plaintiffs argue that Humana utilizes the flawed AI model because it “know[s] that only a tiny minority of policyholders (roughly 0.2%) will appeal denied claims.” Plaintiffs further argue that nH Predict overrode physicians’ determinations and yielded a “clear financial windfall in the form of policy premiums without having to pay for promised care.” Plaintiffs pleaded causes of action for, among other claims, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, unfair claims settlement, unfair methods of competition, insurance bad faith, unfair and deceptive insurance practices, and common law fraud. Humana challenged the amended complaint and filed a motion to dismiss, which remains pending. In Humana’s moving papers, it noted the marked similarities between plaintiffs’ amended complaint and that which was filed in another action we covered in an earlier issue, Estate of Gene B. Lokken v. UnitedHealth Group, Inc., pending in the US District Court for the District of Minnesota.

Why We’re Watching
Superficially, the complaint in this matter appears to raise a novel legal issue because Medicare Advantage plans only recently incorporates AI into their claims evaluation processes. But the substantive legal issues presented—i.e., whether plaintiffs must exhaust the administrative appeals process before seeking judicial review, and whether plaintiffs’ claims are preempted – have long been litigated.

We will continue to monitor and report on the dockets in both cases, but do not expect the way the cases are treated in court to be different than others simply because an AI model caused the alleged breaches.

This case involves:

Faulty AI Tools

Health insurer Humana was sued in a class action challenging the process by which it made claim determinations and alleging that it knowingly used a “highly inaccurate” artificial intelligence model, nH Predict, to improperly deny elderly patients coverage for care under their Medicare Advantage plans. Plaintiffs claim that the use of nH Predict caused an “enormous increase in the number of coverage denial appeals” and that those appeals were successful 90% of the time. Plaintiffs argue that Humana utilizes the flawed AI model because it “know[s] that only a tiny minority of policyholders (roughly 0.2%) will appeal denied claims.” Plaintiffs further argue that nH Predict overrode physicians’ determinations and yielded a “clear financial windfall in the form of policy premiums without having to pay for promised care.”

State Law Claims

Various state law claims were asserted in Barrows. Among other nationwide claims, the class plaintiffs brought the following state law claims:
- Violation of North Carolina Unfair Claims Settlement Practices
- Violation of North Carolina Unfair Methods of Competition
- Minnesota Unfair and Deceptive Insurance Practices

Class Actions

This matter was commenced as a class action.

Judge’s Stats
Hon. Rebecca Grady Jennings
Assumed Office April 19, 2018
Appointed by Donald Trump

Judge Jennings grants 44% of contested motions to dismiss and 44% of motions for summary judgment.

Judge Jennings has a 27% reversal rate.

Plaintiffs’ Attorneys
Lead Counsel:
John C. Whitfield, Esq.
Whitfield Crosby & Flynn PLLC

Plaintiff's Counsel

1. Milberg Coleman Phillips Grossman PLLC located in Chicago Illinois is highly active in class action lawsuits, including those related to consumer protection, data privacy, and technology.

672 cases filed in Federal District Court from January 1, 2024 to August 1, 2024
459 cases remain open
659 cases representing Plaintiffs
329 Class Action
319 Consumer Protection
307 Product Liability
6 Trademark
11 Internet

2. Clarkson Law Firm, P.C. located in Malibu, California is known for handling a variety of high-profile cases, particularly in the realm of public interest and class action lawsuits including Fertility Negligence, Consumer Protection, Technology and Data Privacy and Employment Law and False Advertising.

38 cases filed in Federal District Court from January 1, 2024 to August 1, 2024
31 cases remain open
35 cases representing Plaintiffs
25 Class Action
23 Consumer Protection
12 Product Liability
2 Internet

3. Guilfoyle Law Office, LLP is located in New Albany, Indiana. The practice area is debt and bankruptcy.

4. Whitfield Crosby & Flynn PLLC located in Madisonville, KY handles primarily personal injury cases.

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If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.

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