UnitedHealth Faces Lawsuit Over AI Use to Deny Medicare Claims

A federal judge in Minnesota has dismissed five out of seven counts in a class action lawsuit against UnitedHealth Group, allowing the case to proceed.

Jeff Lagasse, editor at Healthcare Finance, reports that the lawsuit against UnitedHealth Group alleges that the defendants improperly denied claims for post-acute care in Medicare Advantage plans by relying on an artificial intelligence program rather than medical professionals.

Plaintiffs who were denied coverage argue that these AI-driven denials led to worsening health conditions and, in some cases, death. The court is allowing claims for breach of contract and breach of the implied covenant of good faith and fair dealing to move forward.

The lawsuit claims that NaviHealth’s AI program, nH Predict, overruled physician judgments and had a 90% error rate, with nine out of ten appealed denials later reversed.

An investigation by the Health and Science newsletter STAT, cited in the case, suggests that UnitedHealth pressured employees to adhere to AI-generated predictions, leading to premature discharges and financial hardship for elderly patients.

The plaintiffs argue that UnitedHealthcare failed to uphold its contractual obligation to provide medically necessary care and make coverage decisions through clinical staff.

UnitedHealth denies the allegations, stating that nH Predict is used only as a guide and that coverage decisions follow Medicare and plan guidelines.

The case is part of a larger trend of insurers facing scrutiny for AI-driven claim denials. In 2023, Cigna was sued for allegedly using an algorithm, PXDX, to automate mass claim denials. The company denied AI was involved.

Similarly, Humana faced allegations of prematurely ending payments for rehabilitative care while using nH Predict. These cases raise concerns about the role of AI in healthcare decision-making.

Critics argue that insurers prioritize profit over patient care. Companies maintain that AI is merely an assistive tool and not a decision-maker.