UnitedHealthcare uses AI that wrongfully denies '90%' of claims, says lawsuit

Although artificial intelligence is in its early stages in the health-care industry, it already has triggered legal action. A class-action lawsuit filed on Tuesday alleges that UnitedHealthcare used an artificial intelligence algorithm to wrongfully deny coverage under Medicare Advantage health policies.

The insurer made health-care determinations using its nH Predict algorithm, overrode physician recommendations, and denied elderly patients’ claims for stays in extended-care facilities, according to the lawsuit in the U.S. District Court for the District of Minnesota. The plaintiffs also alleged the technology lets the company “aggressively deny coverage, because they know they will not be held accountable for wrongful denials.”

When these coverage denials are appealed to federal administrative law judges, about 90% are reversed, demonstrating the “blatant inaccuracy” of the nH Predict algorithm and attesting to the AI’s ”90% error rate,” the complaint said.

UnitedHealthcare was “effectively using AI to throw the elderly — our parents or grandparents — out onto the street,” said Ryan Clarkson, managing partner of Clarkson Law Firm. The company countered that “this lawsuit has no merit, and we will defend ourselves vigorously.”

The plaintiffs named in the lawsuit are estates for deceased people who were covered by Medicare Advantage plans provided by UnitedHealthcare but denied coverage for at least some of their time in extended care. The family of one of those patients, Gene B. Lokken, had continued paying for Lokken’s care at a skilled nursing facility after UnitedHealthcare allegedly stopped covering it. That amounted to between $12,000 to $14,000 for about a year.

Another patient, Dale Henry Tetzloff, had contacted UnitedHealthcare to see why he had been denied coverage and was told such information was confidential, the complaint said. The complaint also noted that Tetzloff’s out-of-pocket expenses for care were more than $70,000.

“Defendants bank on the patients’ impaired conditions, lack of knowledge and lack of resources to appeal the erroneous AI-powered decisions,” the complaint said.

A spokesperson for naviHealth, the UnitedHealth Group-owned company behind the algorithm, said its tool is not designed to make coverage determinations but “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.”

Related: Cigna sued (again) for allegedly using software that ‘automatically’ denies claims

The lawsuit follows a class action brought earlier this year against Cigna. That lawsuit, filed in the U.S. District Court for the Eastern District of California, accuses Cigna of illegally using advanced technology to automatically deny patient claims without opening their files. Clarkson Law Firm represents plaintiffs in both cases.