Humana was sued over using nH Predict AI to systematically deny Medicare post-acute claims
A class action lawsuit filed on December 12, 2023 alleges that Humana used an AI model called nH Predict, owned by UnitedHealth subsidiary NaviHealth, to override physician determinations and wrongfully deny Medicare Advantage members coverage for post-acute care. The complaint claims Humana set a target to keep post-acute facility stays within 1% of the algorithm's predictions and disciplined employees who deviated. Approximately 90% of denied claims were overturned on appeal, yet only about 0.2% of denied policyholders actually appealed. The Senate Permanent Subcommittee on Investigations published a report in October 2024 scrutinizing Humana and other insurers for AI-driven denials of post-acute care.
Humana enforced a 1% compliance target with an AI model that was wrong 90% of the time when challenged, relying on the fact that only 0.2% of denied policyholders would ever appeal.
Key facts
- What
- A class action lawsuit filed on December 12, 2023 alleges that Humana used an AI model called nH Predict, owned by UnitedHealth subsidiary NaviHealth, to override physician determinations and wrongfully deny Medicare Advantage members coverage for post-acute care.
- Incident date
- Dec 12, 2023
- Who
- Humana
- Failure mode
- Policy Violation
- AI surface
- Agentic Workflow
- Severity
- High
What happened
On December 12, 2023, plaintiffs JoAnne Barrows and Susan Hagood filed a class action complaint against Humana in the U.S. District Court for the Western District of Kentucky, alleging the insurer used an AI model called nH Predict to systematically deny Medicare Advantage members coverage for post-acute care. The algorithm, developed by NaviHealth (acquired by Optum/UnitedHealth Group in 2020), estimated how long patients would need post-acute care and Humana allegedly used these estimates to override treating physicians' determinations. Humana set a goal to keep facility stay lengths within 1% of nH Predict's predictions and disciplined employees who deviated. When patients appealed the algorithm's denials, they were overturned approximately 90% of the time, yet only about 0.2% of denied policyholders actually appealed. Humana's motion to dismiss was denied and the case is proceeding. The Senate Permanent Subcommittee on Investigations published a report in October 2024 finding that Humana's post-acute care denials jumped 54% from 2020 to 2022 and were 16 times higher than its overall prior authorization denial rate.
What broke inside the model
- 01 · TriggerA Medicare Advantage patient needs post-acute care; nH Predict projects the allowed days.
- 02 · Model stepThe model produces rigid recovery predictions that override treating physicians.
- 03 · Control gapNothing reconciles the algorithm's projections with clinical reality, and staff are disciplined for deviating.
- 04 · FailureCoverage is systematically denied on algorithmic timelines.
- 05 · ConsequenceNinety percent of appealed denials are overturned; a class action follows.
The nH Predict algorithm produced rigid and unrealistic predictions for how long Medicare Advantage patients would need post-acute care, overriding treating physicians' clinical determinations. The model was inaccurate enough that 90% of its denials were overturned on appeal, yet Humana enforced compliance by disciplining employees who deviated from the algorithm's estimates. The system effectively functioned as an automated denial engine because only 0.2% of policyholders appealed denied claims, creating a financial incentive to keep using a model known to be wrong in the vast majority of contested cases.
What it cost
Sources
- PressSenate report slams Medicare Advantage insurers for using predictive technology to deny claimshealthcaredive.com
- PressHumana used algorithm to deny care to Medicare Advantage patients, lawsuit claimshealthcaredive.com
- Court FilingBarrows et al. v. Humana, Inc. - Class Action Complaintlitigationtracker.law.georgetown.edu
- PrimaryBarrows et al. v. Humana, Inc. - Health Care Litigation Trackerlitigationtracker.law.georgetown.edu
- PressHealth insurance companies Humana, UnitedHealth accused of wrongly denying claims using AI algorithmcbsnews.com
- Court FilingBarrows et al. v. Humana, Inc. - Class Action Complaint (3:23-cv-00654)classaction.org
Cite this entry
https://failureindex.ai/failures/humana-sued-using-nh-predict-aiAI Failure Index. "Humana was sued over using nH Predict AI to systematically deny Medicare post-acute claims" (FI-0096). Realm Labs. https://failureindex.ai/failures/humana-sued-using-nh-predict-ai (indexed Jun 4, 2026).Data fields CC-BY 4.0, prose citation permitted. Incident ID FI-0096. Full dataset at /data.
Note from Realm Labs, the Index steward
How Realm would have caught this
- Prism
- OmniGuard
Realm compares what the model is about to output or do against the policy that governs the deployment, in real time, and can deny or redact the action before it takes effect, which is the gap an after-the-fact review never closes in time.