UnitedHealth Group Sued Over Alleged AI-Driven Coverage Denials

In a recent development, UnitedHealth Group, the Minnetonka-based healthcare giant, is facing a class-action lawsuit over allegations of using a flawed artificial intelligence (AI) algorithm to wrongfully deny coverage to Medicare patients in need of post-hospitalization rehabilitation care. The lawsuit was lodged in the U.S. District Court of Minnesota following an investigative report by news website STAT, which scrutinized the company’s use of AI technology.

The plaintiffs leading the charge are families from north central Wisconsin, who were burdened with substantial out-of-pocket expenses after being denied coverage for post-acute care. UnitedHealth Group, however, has vehemently denied these accusations, stating that the complaint is baseless and promising a staunch defense.

This litigation emerges amidst increasing concerns from consumers and government officials about health insurers frequently refusing to pay for medically necessary services. The lawsuit alleges that UnitedHealth Group has illegally deployed AI systems, replacing real medical professionals, to unjustly deny elderly patients care under Medicare Advantage plans. The AI model in question reportedly has a staggering 90% error rate.

UnitedHealth Group, which operates UnitedHealthcare – one of the largest health insurers in the country – has refuted these allegations. The company clarified that the AI technology mentioned in the lawsuit is not utilized for making coverage decisions. Instead, it serves as a guide to inform providers, families, and other caregivers about the type of assistance and care the patient may require both during their stay in a facility and upon returning home.

The healthcare giant is the largest provider of Medicare Advantage coverage in the nation. These health plans enable seniors to avail their government-funded benefits through a private insurer. The lawsuit claims that UnitedHealth’s Medicare plans have denied payment for claims from patients’ medical caregivers, resulting in plaintiffs incurring up to $70,000 in out-of-pocket costs for ongoing care.

The lawsuit further alleges that UnitedHealth Group restricts its employees’ ability to deviate from the AI predictions. Employees who fail to adhere to the model face disciplinary action and termination, regardless of the patients’ actual care needs.

The lawsuit paints a grim picture of a fraudulent scheme where the defendants enjoy financial gains from policy premiums without paying for promised care. Elderly patients are prematurely discharged from care facilities nationwide or forced to drain family savings for necessary medical care because an AI model disagrees with their doctors’ determinations. The lawsuit argues that UnitedHealth Group continues to use the flawed AI model as very few patients typically contest health insurance denials.

The company uses an AI model known as “nH Predict” to forecast the recovery time for patients in facilities like nursing homes and other post-acute settings. The lawsuit includes a sample report by NaviHealth, a company UnitedHealth Group acquired in May 2020, which assesses a patient’s mobility, activity level, and cognition scores to estimate the length of stay in a skilled nursing facility.

Plaintiffs claim that UnitedHealth banks on patients’ impaired conditions, lack of knowledge, and lack of resources to appeal the erroneous AI-powered decisions. This lawsuit comes on the heels of several other legal actions against UnitedHealth Group. In July, the U.S. Department of Labor sued a subsidiary of the group over allegations of wrongfully denying thousands of claims by healthcare providers for emergency room services and drug screenings.

As more details emerge in this latest ai news, it underscores the importance of responsible and accurate use of AI tools in healthcare. While AI has the potential to revolutionize healthcare delivery, this case serves as a stark reminder that improper use can lead to significant consequences.