Merriam, Kansas-based Advent Health Shawnee Mission Hospital has filed a lawsuit against Blue Cross and Blue Shield of Kansas City for artificial intelligence-driven technology that the provider said audits claims and overrides doctors' wisdom on necessary patient care.
WHY IT MATTERS
The hospital is also seeking damages for how the payer's alleged withholding of payments for patient care has affected the organization, according to a story in the Kansas City Star.
Shawnee Mission alleges the insurer withheld more than $2 million in payments for its care services, claiming that Blue KC wrongfully denied hundreds of medical diagnoses made by its physicians and thereby violated the parties' contract and state and federal regulations.
The lawsuit, moved to U.S. District Court for the Western District of Missouri, reportedly cited about 350 cases where Blue KC deemed diagnoses "clinically invalid and unsupported" per the clinical validation technology, which the hospital said focuses on comorbidities and complications to deny the claims.
The payer reportedly uses Apixio, a platform that analyzes structured and unstructured data to develop patient health profiles, for automated claims analyses and previously used Cotiviti.
Apixio's marketing boasts that its technology revealed that "a staggering 60% of the hospital stays it reviews include clinically invalid medical diagnoses," according to the KC Star story.
The lawsuit argues that the AI conceals qualifications for overturning physician diagnoses and how AI is used in the payer's processes. The hospital claimed its appeals are often denied instantly without analyses or human contact.
In the past, Blue KC selected Shawnee Mission for distinctions in cardiac care, bariatric surgery, knee and hip replacement, maternity care and spine surgery.
Earlier this year, pieces of Apixio were purchased by Datavant and combined with Machinify, another vendor of healthcare payments software leveraging AI. We have reached out to these companies for comment on the lawsuit, and will update this story if they are provided.
THE LARGER TREND
More than 60% of doctors said they believe that unregulated AI tools systematically deny patients coverage for necessary care, according to an American Medical Association analysis released this year.
AMA said in March that it is concerned that the use of AI is further burdening the prior authorization process and resulting in increasing denials that harm patients.
The Centers for Medicare and Medicaid Services also said, in a memo sent to states last year, that it's concerned AI could "exacerbate discrimination and bias."
Other payers have been sued over alleged use of AI to deny care, including Humana and UnitedHealth Group. Two years ago, a class action lawsuit claimed the former used a hospital readmission prediction model by NaviHealth, a post-acute care management platform, to deny care to Medicare Advantage members. Purchased by UHG's OptumHealth in 2020, that company was eventually renamed Home & Community Care.
CMS clarified in that memo that for Medicare Advantage inpatient admissions, algorithms alone cannot be used as the basis to deny admission or downgrade to an observation stay.
Apixio technology was owned by the insurer Centene from 2020 to 2023. The payer divested Apixio to New Mountain Capital for $37 billion in assets.
ON THE RECORD
"BCBSKC’s unlawful and unethical actions undermine the fundamental principle that healthcare decisions in America should be made by doctors, with the medical expertise, legal responsibility and accountability for making treatment decisions for their patients and should not be made by auditors, accountants or artificial intelligence devices," according to the lawsuit.
Andrea Fox is senior editor of Healthcare IT News.
Email: afox@himss.org
Healthcare IT News is a HIMSS Media publication.
