Associated Incidents
UnitedHealthcare is being sued for allegedly using unreliable artificial intelligence algorithms to wrongfully deny payment for post-acute managed care.
The three defendants named in the complaint filed Tuesday are UnitedHealth Group, its health insurance segment UnitedHealthcare, and its subsidiary technology firm NaviHealth, which created the AI tool at issue called nH Predict.
The complaint alleges that nH Predict has an error rate of 90%, but UHG continues to use it because only a small proportion of policyholders tend to appeal denied claims for service. The rest either pay out-of-pocket for the denied care or forgo the care entirely, it said.
“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 complaint noted. “Defendants also utilize the nH Predict AI Model to aggressively deny coverage because they know they will not be held accountable for wrongful denials.”
Plaintiffs are seeking damages for out-of-pocket costs incurred for post-acute care denied by UHG, emotional distress, attorneys’ fees and demanded a jury trial. They estimated that hundreds of individuals could have been wrongfully denied care because of nH Predict, and more than $5 million is potentially at stake.
Some lawmakers have recently drawn attention to Medicare Advantage health insurers’ use of AI applications to deny patients prescribed care. Sen. Richard Blumenthal (D-CT), for example, denounced the practice during a Senate subcommittee hearing in May.
UHG was also accused of relying on results from nH Predict rather than doctors’ opinions to determine whether post-acute care, such as home health, will be approved or denied. As a result, UHG saved money by reducing the labor costs of paying medical professionals to “conduct an individualized, manual review of each of its insured’s claims.”
And where UHG saves money, taxpayers lose money, the complaint alleges. Oftentimes, Medicare-eligible UHG policyholders are told that care was denied “solely due to their Medicare eligibility,” and are directed to instead enroll in Medicare to receive services, it said.