Class action lawsuit against UnitedHealth's AI claim denials advances

Photo: Courtesy UnitedHealthcare

A federal judge has dismissed five out of seven counts in a class action lawsuit against UnitedHealth Group but will allow it to continue, with the suit claiming that UHG, UnitedHealthcare and naviHealth denied claims by using an artificial intelligence program instead of medical professionals in Medicare Advantage plans.

The plaintiffs are members who were denied benefit coverage. They claim in the lawsuit that the use of AI  to evaluate claims for post-acute care resulted in denials, which in turn led to worsening health for the patients and in some cases resulted in death.

They said the AI program developed by UnitedHealth subsidiary naviHealth, nH Predict, would sometimes supersede physician judgement, and has a 90% error rate, meaning nine of 10 appealed denials were ultimately reversed.

The plaintiffs also allege that UnitedHealthcare breached its insurance contract, which stipulated that it would cover medically necessary healthcare services and that coverage decisions be made by clinical staff.

The two remaining claims in the case are one for breach of contract and one for breach "of the implied covenant of good faith and fair dealing."

WHAT'S THE IMPACT

UnitedHealth Group was sued over its alleged use of AI algorithms back in 2023.

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 said.

In a statement issued at the time, 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.

THE LARGER TREND

Cigna was sued the same year for allegedly using AI algorithms to deny claims, and Humana faced a similar accusation in court.

Cugna was accused of developing 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 said at the time that the vast majority of claims reviewed through PXDX were 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. 

Humana was accused of cutting payments prematurely for rehabilitative care. The company uses nH Predict.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.