UnitedHealth faces lawsuit over AI, Medicare Advantage care denials

UnitedHealth Group and its health insurance arm, UnitedHealthcare, are facing a proposed class-action lawsuit alleging an AI algorithm wrongfully denied Medicare Advantage patients care. 

The lawsuit was filed in federal court in Minnesota on Nov. 14 by the families of two deceased UnitedHealthcare Medicare Advantage members. The families alleges the two men were wrongfully denied coverage of medically necessary post-acute care by UnitedHealthcare. NaviHealth, the developer of the algorithm, is also named in the suit.

The plaintiffs allege UnitedHealthcare used an artificial intelligence-powered algorithm, nH Predict, to set coverage criteria for patients in post-acute care. The algorithm predicts how long a patient will need to remain in skilled nursing care, but overrides physicians' determinations of what care a patient needs, the lawsuit alleges. 

"Defendants systematically deploy an AI algorithm to prematurely and in bad faith discontinue payment for healthcare services for elderly individuals with serious diseases and injuries," the lawsuit stated. 

The families of the two MA members in the lawsuit said they had to pay thousands of dollars out of pocket for post-acute care after UnitedHealthcare denied continued coverage for stays in skilled nursing facilities. 

The plaintiffs allege UnitedHealthcare set a goal to keep skilled nursing facility stay lengths for MA members within 1% of nH predict's estimations. Employees who deviate from the algorithm's estimates are "disciplined and terminated, regardless of whether a patient requires more care," the lawsuit alleges. 

When decisions made by the algorithm are appealed, they are overturned 90% of the time, the plaintiffs allege. 

The nH Predict algorithm was created by naviHealth, a care management company acquired by Optum in 2020. 

The naviHealth Predict tool is not used to make coverage determinations, an Optum spokesperson told Becker's. 

"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," the spokesperson said. "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." 

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