The nation’s largest insurer is illegally using programs driven by artificial intelligence to override the decisions of medical professionals and wrongfully force seniors from nursing homes, a potential class action lawsuit filed Tuesday alleges.
A lawyer representing the plaintiffs told Reuters that the class, if certified by the court, could include tens of thousands of plaintiffs, and that claims for damages could reach billions of dollars.
The case is being brought by the estates of Gene B. Lokken and Dale Henry Tetzloff, both Medicare Advantage beneficiaries whose coverage for skilled nursing care was abruptly cut off just days into their stays. Doctors overseeing their treatment insisted they needed further in-patient services, but both cases were denied on appeal. Each family paid for months of continued SNF care out-of-pocket until both men died earlier this year.
In documents filed in US District Court in Minnesota, attorneys argued that the post-acute care coverage was wrongfully terminated by UnitedHealthcare using its nH Predict AI Model.
“Defendants failed to use reasonable standards in evaluating the individual claims of Plaintiffs and Class members and instead allowed their coverage needs to be wholly determined by AI,” they wrote. “By engaging in this misconduct, Defendants breached their fiduciary duties, including their duties of good faith and fair dealing, because their conduct serves Defendants’ own economic self-interest and elevates Defendants’ interests above the interests of the insureds.”
Insurers have been under increasing scrutiny as the use of AI in patient-facing decisions becomes more apparent. Congress has held hearings on denial patterns, and STAT News on Wednesday released its latest investigation into the issue. It cited former UnitedHealthcare employees who said claims denials were aligned with algorithm-based calculations by design, even when it came to discontinuing coverage for seriously ill patients.
Patients and providers alike have decried the practice, which if not proven, had at least appeared rampant due to the synchronicity of predicted and actual coverage end dates. The Centers for Medicare & Medicaid Services has instituted several limitations on how MA insurers can deny care in the future, but those changes don’t kick in until Jan. 1. Experts also have said they are uncertain if the updated MA rule will have enough bite to prompt real change by plans.
Tuesday’s lawsuit attempts to force UnitedHealthcare’s hand by hitting its wallet.
“The fraudulent scheme affords Defendants a clear financial windfall in the form of policy premiums without having to pay for promised care, while the elderly are prematurely kicked out of care facilities nationwide or forced to deplete family savings to continue receiving necessary medical care, all because an AI model ‘disagrees’ with their real live doctors’ determinations,” lawyers for the initial plaintiffs wrote.
Only about 10% of claims are ever appealed by residents, but when they are, previous reports have found that beneficiaries are often victorious. However, the risk of losing the appeal and being held financially responsible for a lengthier stay — such as was the case for the plaintiffs — continues to discourage requests for review.
“Defendants continue to systemically deny claims using their flawed AI model because they know that only a tiny minority of policyholders (roughly 0.2%) will appeal denied claims, and the vast majority will either pay out-of-pocket costs or forgo the remainder of their prescribed post-acute care,” the plaintiffs attorneys noted. “Defendants bank on the patients’ impaired conditions, lack of knowledge, and lack of resources to appeal the erroneous AI-powered decisions.”
UnitedHealthcare Inc., the insurance arm of UnitedHealth Group Inc., provides health insurance plans for 52.9 million Americans. The company did not immediately respond to McKnight’s Long-Term Care News’ request for comment, but it has said previously that the case is without merit.
