A series of high-profile lawsuits in the last two years have targeted major health insurers over their use of AI in healthcare claims processing. These cases revolve around allegations that AI-driven tools have been used to systematically deny necessary care, sometimes overriding physician judgment and bypassing required individualized review. In this article we look at most significant recent lawsuits and how they are shaping the AI insurance landscape.
Kisting-Leung et al. v. Cigna Corp filed in July, 2023
In this case plaintiffs claim that Cigna (the 4th largest insurance company in the US, according to Investopedia) used an AI tool called “PXDX” to automatically reject claims without individualized review by a physician. According to the lawsuit, Cigna doctors denied over 300,000 claims using this method, spending on average just 1.2 seconds per claim and signing off on denials in batches. Moreover, plaintiffs claim that Cigna did not disclose the use of the PXDX algorithm and falsely stated that medical directors had made the claim decisions.
Estate of Lokken v. UnitedHealth Group, Inc. filed in November, 2023
UnitedHealth has been accused of using an AI model called “nH Predict” (developed by NaviHealth, a UnitedHealth subsidiary) to prematurely terminate coverage for post-acute care, such as rehabilitation stays, for elderly patients. The lawsuit claims that the AI model’s recommendations override treating physicians, apply rigid criteria, and lead to high rates of wrongful denials.
Barrows et al. v. Humana, Inc., filed in December, 2023
Similarly to UnitedHealth, Humana was accused of using the “nH Predict” AI model to wrongfully deny medically necessary care for elderly and disabled patients under Medicare Advantage. Plaintiffs claim that the insurer knowingly used a "highly inaccurate" AI model to deny coverage. This has led to a surge of appeals, 90% of which were reportedly successful, suggesting systemic issues with the model’s accuracy.
Common Legal Themes and Implications for AI Insurance Providers
Recent lawsuits against healthcare insurers for AI-driven claim denials reveal key legal risks that AI insurance providers must now consider. A major issue is the reliance on algorithms over human judgment, which raises concerns about liability when AI systems make flawed or unchecked decisions. Insurers of AI systems will need to scrutinize how much autonomy these tools have and whether proper oversight exists.
Transparency is another critical concern. Plaintiffs claim that insurers failed to disclose their use of AI or misrepresented how decisions were made. For AI insurance providers, this underscores the importance of insuring systems that are explainable, well-documented, and compliant with disclosure standards.
The lawsuits also highlight high error and denial rates, with many decisions overturned on appeal pointing to potentially systemic flaws in the AI. This suggests a need for tighter underwriting, more frequent audits, and clearer policy exclusions for known risks.
These cases are being pursued under multiple legal theories, including breach of contract, bad faith, and consumer protection violations. As a result, AI insurers must prepare for complex, multi-dimensional claims and craft policies that clearly define coverage in the context of evolving legal standards.
Conclusion:
As these legal battles unfold, they’re setting important precedents for how AI is governed and insured across all industries. We will keep following such cases and track how they shape the legal, regulatory, and operational landscape for AI insurance providers. Stay tuned as we continue to explore where AI liability is headed next.
References:
- The Legal Landscape for AI-Enabled Decisions for Health Care Claims and Coverage Continues to Evolve: From Litigation to Emerging Legislation
- Estate of Gene B. Lokken et al. v. UnitedHealth Group, Inc. et al. - Health Care Litigation Tracker
- Class Action Watch: AI and Healthcare Claim Denials - RapidFunds®
- Two Companies Hit with Separate AI-Washing Securities Lawsuits | The D&O Diary
- Medical Malpractice in 2025: How AI in Healthcare Is Changing Lawsuits | Brandon J Broderick
- Health Insurers Sued Over Use of Artificial Intelligence to Deny Medical Claims | ArentFox Schiff
- The promise and peril of AI in healthcare: a cautionary tale of UnitedHealthcare | The Bulletin of the Royal College of Surgeons of England
- Lawsuits take aim at use of AI tool by health insurance companies to process claims - CBS News
- Judge: Lawsuit over UnitedHealth AI care denials in Medicare Advantage can move forward
- AI Ethics Essentials: Lawsuit Over AI Denial of Healthcare
- AI Infringement Case Updates: April 14, 2025: McKool Smith
- Class action lawsuit against UnitedHealth's AI claim denials advances | Healthcare Finance News
- Clarkson Sues Humana Over AI Denying Claims
- Key Takeaways from Recent Class Action Alleging an Insurance Company Used AI to Improperly Decline Medical Coverage - Wiggin and Dana LLP - Attorneys At Law
- AI lawsuits against MCOs – recommendations to minimize risk | Perspectives | Reed Smith LLP
- UnitedHealthcare’s AI Use to Deny Claims is Center of Industrywide Debate - HFS Research
