AI News Monitor

Advent Health Shawnee Mission Hospital has filed a lawsuit against Blue Cross and Blue Shield of Kansas City (Blue KC), accusing the insurer of using artificial intelligence to wrongfully deny more than $2 million in claims and override physicians’ medical judgments.

The lawsuit, now in U.S. District Court for the Western District of Missouri, alleges that Blue KC relied on an AI-powered clinical validation tool to reject hundreds of physician-documented diagnoses as “clinically invalid,” violating contractual agreements and federal regulations. The hospital claims the insurer’s system—reportedly powered by Apixio, an AI analytics platform—automatically dismissed claims without proper review, leaving patients and providers in limbo.

“BCBSKC’s actions undermine the principle that healthcare decisions should be made by doctors, not algorithms,” the lawsuit states. Advent Health argues that appeals were frequently denied without human intervention.

Blue KC, which has previously recognized Shawnee Mission for excellence in cardiac and surgical care, has not yet responded publicly. Apixio, now partly owned by Datavant, markets its technology as uncovering “clinically invalid diagnoses” in 60% of hospital stays reviewed.

The case reflects growing scrutiny of AI in insurance. The American Medical Association has warned that unregulated AI tools may exacerbate claim denials, while federal regulators caution against algorithmic bias. Similar lawsuits have targeted UnitedHealth and Humana for allegedly using AI to cut off patient care prematurely.