Budget Blocks AI Lawsuits, UHC Sued By Its Employees, PE Funds Another AI RCM Company

Hey all,

Happy hump day! ZorroRX’s health insurance is through UnitedHealth and there are so many ways in which they show a disregard for their plan members’ physical and economic wellbeing. Still we’ll be holding a candlelight vigil for the executives who stand to lose their bonuses amidst profit shortfalls at the insurer. Enjoy the rundown! 

Jacob Brody (Co-Founder & CEO, ZorroRX)

(HEALTH CARE un-covered) AI Shielding Provision in Federal Spending Bill

A little-noticed provision in a House Republican budget bill would block states from regulating health insurers' use of AI for a decade, effectively shielding insurers from oversight as they increasingly rely on algorithmic systems to approve or deny care. This move comes amid rising concern over AI misuse in healthcare, with evidence showing companies like Cigna and UnitedHealth have used flawed algorithms to deny claims at scale, sometimes with deadly consequences—prompting several states to enact protective laws that would now be nullified. Critics, including over 100 advocacy groups and AI experts, warn the measure could leave patients vulnerable to opaque, unaccountable decision-making systems in critical care determinations. Apparently, the AI doesn’t need to be very “intelligent” if it just denies every claim over $5 unless it’s pre-approved by an in-network provider whose last name starts with the same letter as the patient’s. Full Article.

(BenefitsPro) UHC Faces Employee Class Action Lawsuit

UnitedHealth is facing a new class action lawsuit filed by current and former employees, alleging it misused over $19 million in forfeited 401(k) funds to reduce its employer contributions—an alleged violation of ERISA rules. The lawsuit follows a series of crises at the company, including its CEO's abrupt resignation, a DOJ criminal investigation, and growing legal scrutiny across the healthcare sector over retirement plan practices. UnitedHealth now appears to have turned its attention from extracting vakye from members to its own workforce. Full Article

(Fierce Healthcare) New Mountain Capital Launches AI-Enabled RCM Platform

New Mountain Capital has launched Smarter Technologies by merging Access Healthcare, Thoughtful.ai, and SmarterDx into a single AI-powered platform aimed at automating healthcare revenue cycle management. The new entity, combining 27,000 employees and managing $200 billion in revenue annually, leverages agentic AI, machine learning, and human-in-the-loop processes to cut administrative costs and improve billing accuracy across over 200 clients. Because if your billing system costs more than most countries’ GDP, maybe it's time to admit the real pre-existing condition is the paperwork. Full Article