UnitedHealthcare hit with class action over alleged use of AI to deny Medicare Advantage claims

UnitedHealthcare is facing a potential class-action lawsuit following allegations that it used an algorithm to deny claims for post-acute care services in Medicare Advantage (MA).

The proposed class action was filed Monday by the families of two deceased MA members, who argue that the insurer "illegally" deployed the naviHealth platform to deny medically necessary care to seniors. The lawsuit said the technology has a "90% error rate."

The plaintiffs allege that despite that high error rate, UnitedHealth continued to deploy the technology because a very small number of members, less than 1%, generally appeal denied claims.

"Defendants bank on the patients’ impaired conditions, lack of knowledge, and lack of resources to appeal the erroneous AI-powered decisions," they said in the lawsuit.

The suit comes on the heels of an investigative report this week from Stat, which dug into the use of naviHealth. Employees at UnitedHealthcare were pressured to use the technology to cut costs, Stat reported.

In a statement to Fierce Healthcare, a UnitedHealth spokesperson said the platform is not used to make decisions on coverage.

“The naviHealth predict tool is not used to make coverage determinations. The tool 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," the spokesperson said. "Coverage decisions are based on CMS coverage criteria and the terms of the member’s plan."

"This lawsuit has no merit, and we will defend ourselves vigorously," they said.

The lawsuit claims that the naviHealth predict tool determines the member's eligibility for post-acute care coverage based on "rigid and unrealistic predictions for recovery." The tool predicts how much care a patient "should" need, according to the lawsuit, which can lead it to override physicians' determinations on what their recovery requires.

Through this, UnitedHealthcare's post-acute care claims denials have increased significantly, according to the suit.

"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," the plaintiffs wrote.

The lawsuit also follows increased scrutiny of insurers' potential use of artificial intelligence and algorithms to deny member claims. Cigna has also been hit with multiple lawsuits over its PxDx tool, which drew public scrutiny earlier this year after a ProPublica report alleged it was used to systematically deny thousands of claims, at times in just seconds.