The most closely watched prior authorization lawsuit of 2026 is the Electronic Frontier Foundation’s Freedom of Information Act case against the Centers for Medicare and Medicaid Services, filed March 25, 2026, which seeks records about a Medicare AI pilot that decides whether to approve certain procedures. It joins a cluster of active federal class actions accusing UnitedHealth, Cigna, and Humana of using algorithms to deny medically necessary care, and a wave of new state laws restricting how insurers can use artificial intelligence in coverage decisions.
EFF v. CMS: The Fight Over Medicare’s WISeR AI Pilot
CMS launched the Wasteful and Inappropriate Service Reduction (WISeR) model on January 1, 2026, as a six-year pilot in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. It applies to traditional fee-for-service Medicare, not Medicare Advantage.1CMS.gov. Wasteful and Inappropriate Service Reduction (WISeR) Model Six private technology vendors use AI and machine-learning tools to evaluate prior authorization requests for services such as skin substitutes, nerve stimulator implants, spinal procedures, epidural steroid injections, and knee arthroscopy for osteoarthritis.2Federal Register. Medicare Program: Implementation of Prior Authorization for Select Services for the WISeR Model Those vendors are compensated through a share of the money Medicare saves when services are denied, reaching as high as 20 percent of associated savings.3EFF. EFF Sues for Answers About Medicare’s AI Experiment
The EFF submitted a FOIA request to CMS in late January 2026 asking for vendor agreements, records of any testing for accuracy, bias, or AI “hallucinations,” and records of audits or evaluations of the program’s safeguards. CMS produced nothing, and the EFF sued.4EFF. EFF v. CMS The nonprofit calls the pay-for-denials structure a “perverse” financial incentive and says the pilot potentially affects as many as 6.4 million Medicare beneficiaries.3EFF. EFF Sues for Answers About Medicare’s AI Experiment CMS maintains that all recommendations to deny payment come from licensed clinicians applying evidence-based standards and that the AI assists rather than replaces human decisions.1CMS.gov. Wasteful and Inappropriate Service Reduction (WISeR) Model As of mid-2026, the FOIA case is in its early stages, with no court rulings or document productions publicly reported.5Fierce Healthcare. Nonprofit Electronic Frontier Foundation Sues CMS Over AI Prior Authorization
Early field reports help explain why the suit matters. The Center for Medicare Advocacy reported that doctors across all six pilot states described the program as more cumbersome, with technical glitches, portal failures, and some authorization decisions reportedly exceeding federal deadlines. Ohio physicians said the AI was so ineffective at complex treatments that some considered dropping those services for seniors entirely.6Center for Medicare Advocacy. Early Reports on WISeR Model Are Troubling A Washington Post analysis of Texas data, cited in the EFF suit, showed only 62 percent of WISeR requests were initially approved; after human review the approval rate rose to 84 percent, still below the 92 percent national approval rate for Medicare Advantage prior authorization.7American Academy of Sleep Medicine. CMS WISeR Prior Authorization Lawsuit In April 2026, CMS delayed expansion to deep brain stimulation and percutaneous image-guided lumbar decompression, citing the need for additional operational readiness time. No new implementation date was announced.8Federal Register. Medicare Program: Delayed Implementation of Certain Prior Authorization for Select Services for the WISeR Model
UnitedHealth and the nH Predict Class Action
In November 2023, families of two deceased Medicare Advantage beneficiaries sued UnitedHealth Group, UnitedHealthcare, and NaviHealth in federal court in Minnesota. The complaint alleges the companies used an AI tool called nH Predict to override treating physicians and cut off post-acute care coverage, that the algorithm had a 90 percent error rate (nine of ten appealed denials were reversed), and that employees were held to internal targets requiring skilled nursing facility stays to stay within one percent of the algorithm’s prediction. UnitedHealth has said nH Predict is a “guide to help us inform providers” rather than a coverage-decision tool and has called the suit meritless.9CBS News. UnitedHealth Lawsuit AI Deny Claims Medicare Advantage Health Insurance Denials
In February 2025, a federal judge dismissed five of the seven counts but allowed breach of contract and breach of the implied covenant of good faith and fair dealing to proceed.10Healthcare Finance News. Class Action Lawsuit Against UnitedHealth’s AI Claim Denials Advances In March 2026, a federal magistrate judge ordered UnitedHealth to produce a broad swath of discovery dating back to 2017, including documents analyzing nH Predict, records about the NaviHealth acquisition, information about government investigations into the company’s use of AI, and contact details for medical directors involved in denials for 300 proposed class members. The court declined to compel production of nH Predict’s source code.11Becker’s Payer Issues. Judge Orders UnitedHealth to Hand Over Broad Discovery in AI Coverage Denial Case The case is now in class-certification briefing, with a ruling expected later in 2026.12Georgetown Law Litigation Tracker. Estate of Gene B. Lokken et al. v. UnitedHealth Group, Inc. et al.
Cigna and the PxDx Algorithm
Two parallel lawsuits target Cigna’s PxDx (procedure-to-diagnosis) algorithm. Kisting-Leung v. Cigna Corp. was filed in July 2023 in the Eastern District of California; Snyder v. The Cigna Group was filed in November 2023 in the District of Connecticut. Both allege Cigna used PxDx to deny claims in bulk without meaningful physician review, processing more than 300,000 denials in a two-month stretch in 2022 at an average of roughly 1.2 seconds per claim.13Courthouse News Service. Judge Advances Class Claims Over Cigna Use of Automated Algorithm to Deny Benefits Cigna has said PxDx is a standard review process and does not use artificial intelligence.14Healthcare Dive. Cigna Lawsuit Algorithm Claims Denials California
On March 31, 2025, Judge Dale Drozd issued rulings in both cases that let key claims move forward. In Snyder, the court denied Cigna’s motion to dismiss the ERISA breach-of-fiduciary-duty claim, finding that Cigna’s position (that an algorithm can satisfy a plan’s physician-review requirement as long as a medical director “pushes the button”) conflicted with the plan’s plain language.13Courthouse News Service. Judge Advances Class Claims Over Cigna Use of Automated Algorithm to Deny Benefits In Kisting-Leung, the court allowed a California unfair-competition claim to survive, ruling it was not preempted by ERISA.15Bloomberg Law. AI Algorithm-Based Health Insurer Denials Pose New Legal Threat Both cases remain active in 2026.16CourtListener. Kisting-Leung v. Cigna Corp.
Humana
Barrows v. Humana, Inc. was filed in December 2023 in the Western District of Kentucky. The complaint alleges Humana used an AI model to override treating physicians’ medical-necessity determinations by relying on aggregated patient data rather than individual circumstances. As of June 2026, briefing is ongoing, with a status report due in July.17Georgetown Law Litigation Tracker. Barrows et al. v. Humana, Inc.
What’s Fueling the Suits: Senate and DOJ Scrutiny
In October 2024, the U.S. Senate Permanent Subcommittee on Investigations issued a report drawn from more than 280,000 pages of internal documents from UnitedHealthcare, CVS, and Humana. It concluded that all three insurers “intentionally use prior authorization to boost profits by denying post-acute care.” UnitedHealthcare’s post-acute care denial rate rose from 10.9 percent in 2020 to 22.7 percent in 2022 as it expanded automated processes. CVS increased the number of post-acute care requests subject to prior authorization by 57.5 percent between 2019 and 2022 and deployed an AI tool called “Post-Acute Analytics” in April 2021. Humana’s denial rate for long-term acute care hospital requests grew 54 percent over a similar period.18U.S. Senate. Senate Permanent Subcommittee on Investigations Releases Majority Staff Report
UnitedHealth Group confirmed in a July 2025 securities filing that it is cooperating with Department of Justice criminal and civil inquiries into “certain aspects of the Company’s participation in the Medicare program.” The company said it proactively contacted DOJ after media reports about the investigation and expressed “full confidence in its practices.”19UnitedHealth Group. UHG Responds to DOJ Investigation By August 2025, reporting indicated the probe had expanded beyond Medicare Advantage to Optum Rx billing and physician reimbursement, with a separate antitrust inquiry also underway. No charges had been filed as of that date.20Fierce Healthcare. DOJ Interviewing Former Employees About Medicare Billing Practices at UnitedHealth
State Laws Now Restrict AI in Prior Authorization
California’s Senate Bill 1120, signed by Governor Gavin Newsom in September 2024, bars insurers from basing medical-necessity decisions solely on group datasets and requires that such decisions rest on a patient’s individual medical history and clinical circumstances. AI tools cannot autonomously deny, delay, or modify care; final determinations must come from licensed physicians. Insurers must disclose how they use AI, submit compliance records to regulators, and open their tools to audit by the California Department of Insurance and the Department of Managed Health Care.21California Department of Insurance. SB 1120 Guidance
Maryland’s HB 820, signed in May 2025 and effective October 1, 2025, likewise requires AI-driven coverage determinations to be based on individual clinical history rather than group or demographic statistics. It mandates human clinician oversight, at least quarterly performance reviews of any AI tools, and insurer reporting to the state insurance commissioner on how often AI factors into adverse decisions. Violations can bring misdemeanor charges and suspension or revocation of an insurer’s certificate.22Maryland General Assembly. HB 082023Alston & Bird. Maryland AI Health Care Utilization Management
Broader prior authorization reforms are also spreading. At least ten states have adopted “gold card” programs that exempt providers with high approval rates from prior authorization. Indiana, Iowa, and Montana have set strict decision timelines; Indiana’s are 24 hours for urgent requests and 48 hours for non-urgent ones. Minnesota, effective January 2026, prohibits prior authorization entirely for emergency services, outpatient mental health and substance-use disorder treatment, and certain cancer treatments.24National Conference of State Legislatures. How States Are Reforming the Prior Authorization Process25Minnesota Medical Association. Prior Authorization
Federal Rules and Pending Bills
In January 2024, CMS finalized rule CMS-0057-F, requiring Medicare Advantage plans, Medicaid managed care plans, and qualified health plan issuers on the federal exchanges to issue prior authorization decisions within 72 hours for urgent requests and seven calendar days for standard requests, starting in 2026. Payers must give a specific reason for any denial and publicly report prior authorization metrics, with automated electronic prior authorization systems required by January 1, 2027.26CMS.gov. CMS Finalizes Rule to Improve Prior Authorization Process
Two bipartisan bills are pending. The Reducing Medically Unnecessary Delays in Care Act of 2025, reintroduced in March 2025 by Representatives Mark Green and Kim Schrier, would require prior authorization decisions in Medicare, Medicare Advantage, and Part D to be made by board-certified physicians with expertise in the relevant specialty.27The Hill. Bipartisan Bill Seeks to Get Rid of Prior Authorization The Improving Seniors’ Timely Access to Care Act, reintroduced in May 2025 by Senators Roger Marshall and Mark Warner, would establish standardized electronic prior authorizations for Medicare Advantage and create a pathway for real-time decisions on routinely approved services. It had support from more than 160 organizations, 47 senators, and 73 House members as of June 2025.28Wisconsin Hospital Association. Improving Seniors’ Timely Access to Care Act A prior version failed in the Senate in 2024.29National Center for Biotechnology Information. AI in Medicare Advantage Prior Authorization
The EFF’s FOIA suit against CMS is still pending. The UnitedHealth nH Predict case is approaching a class-certification ruling. The Cigna PxDx litigation continues in two federal courts, and Barrows v. Humana is awaiting its next status report. The WISeR pilot, despite the early turbulence, remains operational in all six states.