This case is worse than just not working: the algorithm generates alert fatigue and misleads doctors who would do a better job and come to better decisions without the algorithm. In the hospital context, a fair characterisation might be that the algorithm causes deaths.
Prior to this algorithm most Epic customers had an alert for providers to check for Sepsis in a patient. In most cases the Epic tool is an improvement in over alerting.
That provides important context. However, based on the news, Epic has not been honest in their marketing of this feature. If you provide something that is less harmful but still harmful, you have to disclose that the real solution would be something else - fixing the insurance system, liabilities?
Just like the days when every program would pop up warning after warning asking, "are you sure?". After a while users started to treat them as annoyances interfering with the task and automatically close them. They became worse than useless because among the noise there would sometimes be serious events that would lead to corruption or loss of data.