UnitedHealth AI algorithm allegedly led to Medicare Advantage denials, lawsuit claims

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A class action lawsuit filed this week alleges that healthcare giant UnitedHealth Group unlawfully used an artificial intelligence algorithm to deny rehabilitative care to sick Medicare Advantage patients.

The suit claims that UnitedHealth knew the AI algorithm had a high potential for error.

The algorithm in question is nH Predict, which was developed by UnitedHealth subsidiary NaviHealth, which the former acquired in 2020. One of the allegations is that UnitedHealth uses nH Predict to evaluate claims for post-acute care, including in-home care and extended stays in skilled nursing facilities, and that the company uses the algorithm to "prematurely and in bad faith" halt payments for healthcare services.

A STAT investigation, which was cited in the lawsuit, suggests UnitedHealth pressured employees to use the algorithm to issue payment denials to those on Medicare Advantage plans, setting a goal for employees to keep patient rehabilitation stays within 1% of the length of stay predicted by nH Predict.

The lawsuit alleges that elderly patients are being prematurely kicked out of facilities, or forced to dip into their family savings, to continue to receive care.

"The fraudulent scheme affords defendants a clear financial windfall in the form of policy premiums without having to pay for promised care," the suit states.

When federal administrative law judges hear appeals on these coverage denials, about 90% are reversed, according to the complaint, though only a small percentage of patients actually file appeals.

Claiming that use of the algorithm violates patient contracts and various state insurance laws, the lawsuit alleges that nH Predict decided claims without properly evaluating them and seeks a court order to stop the use of the algorithm and to award monetary damages.

In a statement, UnitedHealth said nH Predict is not used to make coverage decisions, but instead is 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 company added that coverage decisions are based on the terms of the members' health plans and on criteria laid out by the Centers for Medicare and Medicaid Services. 

UnitedHealth said the suit has no merit.

According to STAT, Humana and several regional health plans use the Nh Predict algorithm.

The suit was brought by the families of two deceased Wisconsin residents who had Medicare Advantage coverage through UnitedHealth. 

THE LARGER TREND

In July, Cigna was sued for allegedly using algorithms to deny claims.

The lawsuit, filed in federal court in California, claimed Cigna developed an algorithm known as PXDX to enable its doctors to automatically deny payments in batches of hundreds or thousands at a time for treatments that did not match certain preset criteria.

A Cigna Healthcare spokesperson, responding by statement, said the vast majority of claims reviewed through PXDX are automatically paid and that the process does not involve algorithms, AI or machine learning, but a simple sorting technology that has been used for more than a decade to match up codes.  

UnitedHealth faced another lawsuit in June over allegedly denying claims. The U.S. Department of Labor brought the lawsuit against UnitedHealth Group subsidiary UMR, claiming it incorrectly denied emergency room and urinary drug screening claims for thousands of patients, thereby failing to comply with the requirements of the Affordable Care Act and the DOL's claims procedures regulation.

According to that complaint, UMR is UHG's third-party administrator, providing benefits services to more than 2,000 self-funded employer health plans.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com