04/30/2026
Three of the country's largest health plans are now in active class action litigation for using algorithms to deny medically necessary care. The legal exposure is no longer theoretical.
Here is where the major cases sit right now.
1. UnitedHealth Group. The class action over the nH Predict AI tool used on post-acute care reviews survived a motion to dismiss in February 2025. Discovery is underway.
💥 Plaintiffs allege the tool produced a 90 percent error rate on appealed denials, meaning nine out of ten denials were ultimately reversed on appeal.
👉 Senate investigators separately documented that UnitedHealth's post-acute denial rate climbed from 8.7 percent in 2019 to 22.7 percent in 2022, and skilled nursing denials increased ninefold over the same window.
2. Cigna. In March 2025, a federal court allowed the class action over the PXDX algorithm to proceed. Internal records cited in the complaint show PXDX was used to deny more than 300,000 claims over a two-month stretch in 2022, with an average denial time of 1.2 seconds per claim.
👉 The court ruled that a medical director "pushing the button" on an algorithmic output does not satisfy the contractual medical necessity review obligation.
3. Aetna/CVS
The Senate Permanent Subcommittee on Investigations released a 54-page report documenting that UnitedHealth, Humana, and CVS systematically targeted post-acute care for AI-driven denials.
👉 CVS rolled out a Post-Acute Analytics project in 2021 that was initially projected to save $10 to $15 million on skilled nursing spend. Internal projections were later revised to $77.3 million.
The common pattern across all three.
💥 Algorithmic denial at scale.
💥 Post-acute care as the deliberate financial target. Internal records that read like a cost reduction plan, not a medical necessity review.
For ASCs, IRFs, and LTACHs, the practical implication is this.
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Courts are no longer treating algorithmic denial as a routine administrative process. That changes what is reasonable to demand in your contract language, your dispute provisions, and your appeal rights.
DM me if you want to talk through where your contracts stand on these issues.