The Knowledge-Reasoning Dissociation: Fundamental Limitations of LLMs in Clinical Natural Language Inference

Large language models are often assumed to acquire increasingly structured, generalizable internal representations simply by scaling data and parameters. We interrogate this assumption by introducing a Clinical Trial Natural Language Inference benchmark comprising four reasoning families, Causal Attribution, Compositional Grounding, Epistemic Verification, and Risk State Abstraction. Each item is paired with a targeted Ground Knowledge and Meta-Level Reasoning Verification (GKMRV) probe, allowing us to dissociate failures of factual access from failures of inference. We evaluate six contemporary LLMs under both direct and chain of thought prompting. Models achieve near-ceiling GKMRV accuracy (mean accuracy 0.918) yet perform poorly on the main reasoning tasks (mean accuracy 0.25). Despite low accuracy, output inferences are highly consistent across samples (mean 0.87), indicating a systematic application of underlying heuristics and shortcuts. These results reveal fundamental structural and representational limitations: current LLMs often possess the relevant clinical knowledge but lack the structured, composable internal representations needed to deploy it reliably (e.g., integrating constraints, weighing evidence, or simulating counterfactuals). Decoupling knowledge from reasoning with GKMRV makes this dissociation explicit and measurable, providing an effective framework for probing the reliability of LLMs in high-stakes domains.