On July 18, 2024, Humana, Inc. (“Humana”) filed a reply brief defending its motion to dismiss a class action lawsuit over its use of artificial intelligence to make Medicare coverage determinations. In the action the plaintiffs are alleging that Humana improperly used an AI system called nH Predict to deny claims for post-acute care.
Humana, a major Medicare Advantage insurer, filed the reply brief in the U.S. District Court for the Western District of Kentucky, responding to the plaintiffs’ opposition to Humana’s motion to dismiss filed on June 27, 2024.
Humana argues the case should be dismissed because among other things, the plaintiffs failed to exhaust mandatory administrative appeals processes, and their claims are preempted by federal Medicare law. The company contends its use of AI in coverage decisions is allowed under Medicare regulations.
In its reply, Humana emphasizes that the plaintiffs’ claims are “inextricably intertwined” with Medicare benefits determinations. The company argues: “The Sixth Circuit’s inquiry for determining whether a claim is ‘entirely collateral’ to a claim for Medicare Benefits is ‘whether the allegedly collateral claim involves completely separate issues from the party’s claim that it is entitled to benefits … or whether it is inextricably intertwined with its substantive claim to benefits or participation.'” Humana contends that there are no separate issues.
It then argues that being squarely in the realm of Medicare benefits, the Medicare Administrative Appeal Process must be exhausted. The brief states, “The Sixth Circuit reaffirmed that Medicare Part C enrollees cannot circumvent the administrative appeal process [warning that] such an upside-down view of exhaustion – of the type Plaintiffs advance here – threatens to “nullify” Congress’ direction …”
Addressing the plaintiffs’ assertion that there are extraordinary circumstances present that warrant judicial waiver, Humana argues that they “have not shown any irreparable harm that would justify an “extraordinary” judicial waiver.”
Humana also contends that both federal common law and statutory claims related to Medicare coverage processes are expressly preempted by the Medicare Act. The reply brief asserts that “courts across the country have routinely concluded that common law causes of action are preempted by the Medicare Act,” and that “Federal standards dictate every step of the process for how [Medicare Advantage Organizations] operate and evaluate claims for Medicare Benefits.”
This case highlights the emerging legal and regulatory issues surrounding the use of artificial intelligence in healthcare coverage decisions. As Humana notes, “CMS has even issued guidance as to whether MAOs can use artificial intelligence in the coverage determination process.” As AI becomes more prevalent in insurance, courts and regulators will likely continue grappling with questions of proper oversight and patient protections.
Categories: AI
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