UnitedHealthcare used AI to deny patients’ health insurance coverage, lawsuit says

This photo shows UnitedHealthcare's corporate headquarters in May 2023. A new class action lawsuit accuses the insurance giant of using an artificial intelligence program to wrongly deny health insurance coverage for patients.
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Health insurance giant UnitedHealthcare Inc. used a flawed artificial intelligence (AI) program to deny care to senior patients using the company’s Medicare Advantage insurance, according to a new class action lawsuit.

The AI had a 90% error rate but UnitedHealthcare continued using it to systematically deny health insurance claims because the company knew only a tiny minority of policy holders – about 0.2% – would appeal the denials, said the lawsuit, published online by news service Reuters.

Instead, the insureds had to pay out of pocket or discontinue post-acute care that was prescribed by their actual human physicians, the complaint said.

The lawsuit was filed this week in U.S. District Court – District of Minnesota by law firms on behalf of the estates of two patients now deceased. Attorneys are seeking class action certification for the case, which could involve patients across 21 states, four years’ worth of insurance claims, and at least $5 million in costs.

The attorneys claimed UnitedHealthcare Inc., parent company UnitedHealth Group Inc., and subsidiary naviHealth Inc. had a monetary incentive to deny medical care to patients who needed it.

“The fraudulent scheme affords Defendants a clear financial windfall in the form of policy premiums without having to pay for promised care, while the elderly are prematurely kicked out of care facilities nationwide or forced to deplete family savings to continue receiving necessary medical care, all because an AI model ‘disagrees’ with their real live doctors’ determinations,” said the lawsuit. UnitedHealthcare’s corporate communications spokesman did not immediately respond to a Nov. 15 request for comments.

UnitedHealth Group denied the claims of the lawsuit and will defend itself vigorously, said a statement from a company spokesman.

Faulty predictions?

UnitedHealthcare’s mission is “to help people live healthier lives and make the health system work better for everyone.” In reality, UnitedHealthcare prematurely and in bad faith quit paying for post-acute care for older patients with serious diseases and injuries, the complaint said.

UnitedHealthcare had an AI program known as “nH Predict,” created by naviHealth, which was acquired by UnitedHealth Group in 2020.

The nH Predict AI Model has a database of 6 million patients compiled over years. The program uses it to analyze a patient’s diagnosis, age, living situation, and physical function, then predict how much post-acute care a patient “should” require. It pinpoints the moment when UnitedHealthcare will cut payment for care, according to the lawsuit.

But when patients appealed, they won more than 90% of the time, either by internal appeal or through federal administrative law judge rulings.

“This demonstrates the blatant inaccuracy of the nH Predict AI Model and the lack of human review involved in the coverage denial process,” the lawsuit said.

UnitedHealth responds

A spokesman for Optum Health, a division of UnitedHealth Group, said the company made health coverage decision based on criteria of the U.S. Centers for Medicare & Medicaid Services (CMS) and health insurance plans.

“The naviHealth predict tool is not used to make coverage determinations,” said the statement emailed to Medical Economics. “The tool is used as a guide to help us inform providers, families and other caregivers about what sort of assistance and care the patient may need both in the facility and after returning home. Coverage decisions are based on CMS coverage criteria and the terms of the member’s plan. This lawsuit has no merit, and we will defend ourselves vigorously.”

Patients in need

The court complaint named estates as plaintiffs and described the situations of two Wisconsin men who had Medicare Advantage plans through UnitedHealthcare.

In May 2022, Gene B. Lokken, 91, fell at home, fracturing his leg and ankle. He was treated and admitted to a hospice service, but he began recovering. In June, an orthopedic doctor placed him in a removable ankle boot and ordered intensive physical therapy.

About July 20, 2022, UnitedHealthcare terminated Lokken’s coverage, claiming additional days at a skilled nursing facility were not necessary and he could have a safe discharge. Lokken and his physician were “dumbfounded” by the news, so Lokken and his family appealed the insurance ruling, but lost multiple appeals. Lokken and his family paid $12,000 to $14,000 a month out of pocket for almost a year until his death on July 17, 2023.

In October 2022, Dale Henry Tetzloff, 74, suffered a stroke. He was hospitalized and prescribed at least 100 days of post-acute care. After 20 days at a skilled nursing facility, UnitedHealthcare denied additional coverage. Tetzloff’s wife appealed and won, but after 40 days, UnitedHealthcare again denied coverage, claiming Tetzloff was ready for discharge.

Over 10 months, Tetzloff’s health care costs exceeded $70,000. He died Oct. 11, 2023, at an assisted living facility.

Across the nation

Patients may be involved in other states: Arizona, California, Colorado, Delaware, Hawaii, Iowa, Kentucky, Massachusetts, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Vermont, Washington, West Virginia, and Wyoming.

The case was filed in Minnesota because UnitedHealth Group’s corporate headquarters is in that state. UnitedHealthcare provides health insurance plans for 52.9 million people, the lawsuit said.