Humana is facing significant controversies, most notably a class-action lawsuit alleging the use of an AI tool ("nH Predict") to wrongfully deny, limit, or terminate post-acute care coverage for Medicare Advantage patients.
Other issues include federal lawsuits over Medicare billing, data breaches, and a 2025 court loss regarding star ratings that risked billions in payments.
Key Humana Controversies and Lawsuits
AI Coverage Denials (nH Predict):
—A lawsuit alleges Humana uses the "nH Predict" algorithm, developed by naviHealth, to override physicians' recommendations and prematurely cut off rehabilitation or nursing facility stays for elderly patients. The suit claims these, which are "rigid and unrealistic predictions for recovery," are used to maximize profits.
—Medicare Advantage Fraud Allegations: Humana has faced multiple lawsuits under the False Claims Act. In 2024, they were involved in a $90 million settlement related to claims of overbilling the government for Medicare Part D prescriptions.
—Star Ratings Loss (2025): A Texas judge upheld a decision by the Centers for Medicare & Medicaid Services (CMS) to downgrade Humana’s 2024 star ratings for certain plans. This loss threatens billions of dollars in revenue for the company.
—Illegal Kickback Allegations: Lawsuits have alleged that Humana paid illegal kickbacks to insurance brokers, such as SelectQuote, to steer consumers into their Medicare Advantage plans between 2016 and 2021.
—Data Breaches and Security: Humana has reported incidents where unauthorized parties attempted to access member accounts, and they have faced class action suits regarding the protection of sensitive patient information, including a 2026 incident.
—False Statements (OIG Violations): Humana previously agreed to pay over $411,000 for allegedly violating the Civil Monetary Penalties Law by making false claims/statements regarding "meaningful use" payments in their electronic health records.
These legal challenges have created volatility for the company's stock, particularly surrounding the profitability and quality of its Medicare Advantage business, which is the primary source of its revenue.