Elderly Patients Sue UnitedHealth for Using Faulty AI to Gatekeep Claims

A class action lawsuit was recently filed against UnitedHealth for the company's use of artificial intelligence in place of humans to assess approvals in medical care. Let's explore the details of the suit, the legal claims, and what we can expect.

Policyholders vs. Insurance Company

The defendants were collectively UnitedHealth Group, the largest insurance company in the U.S., and their insurance arm, UnitedHealthcare, which insures 52.9 million Americans. The company's stated mission is “to help people live healthier lives and make the health system work better for everyone."

The plaintiffs were elderly patients with serious diseases and injuries who were denied care known as “post-acute care." They claim that this care was owed to them under Medicare Advantage Plans, which is a type of health plan offered by private companies (like UnitedHealth) that contract with Medicare. Such plans must follow the rules set by Medicare.

Defendants provided Plaintiffs and members of the Class with written terms explaining the plan coverage UnitedHealthcare offered to them. According to the written terms that UnitedHealth provided to its policyholders, including the plaintiffs, the company is obligated to provide benefits for covered health services and must pay all “reasonable and medically necessary expenses" that a covered patient incurs.

The named plaintiffs in the complaint are two patients that were covered under insurance policies with UnitedHealth, but who passed away. Their families are bringing the lawsuit on their behalf, as part of their estates. They represent a class of similarly situated policyholders, alive and deceased.

Patients Take Issue With AI Gatekeeping Claims

Where human medical experts are traditionally used to make determinations about the coverage of policyholders of an insurance plan, UnitedHealth used an AI model called “nH Predict." The plaintiffs claim that nH Predict works off “settings with rigid and unrealistic predictions for recovery." Based on the model, UnitedHealth predicts how much care a given patient should require, as opposed to their doctors' determinations based on what care they in fact require. Plaintiffs claim that this resulted in the “inappropriate denial of necessary care prescribed by the patient's doctors" and “a significant increase in the number of post-acute care coverage denials."

The plaintiffs are claiming that UnitedHealth has a whole system set up to make their employees follow the recommendations of nh Predict. Allegedly, UnitedHealth employees are instructed to limit patient stays at skilled nursing facilities to within 1% of the days predicted by the model, and employees who deviate from the model's recommendations are disciplined or even terminated.

Moreover, plaintiffs bring up the faultiness of nH Predict. They claim that UnitedHealth knew that the AI model they used had an error rate of 90%, and yet the company used it to override the patients' doctors' determinations as to what medical care was appropriate.

The plaintiffs allege that UnitedHealth pursued this strategy because they knew that a small fraction (0.2%) of policyholders appeal insurance claims when denied coverage, while most forego treatment or pay out of pocket. This results in elderly patients being asked to leave treatment facilities or forced to drain their savings. The way that the payment system works makes it such that coverage decisions from the insurance company may occur before or during a patient's treatment. If the company decides to end coverage before the doctor's prescribed discharge date, the patients must make a hard choice.

Insurance Company Saves Money With AI Model

On the flip side, it gives the healthcare company a “clear financial windfall" by collecting premiums without having to pay out, as the plaintiffs claim. On top of that, using nH Predict apparently also saves UnitedHealth by eliminating the need to pay medical professionals to conduct a manual review of each policyholder's claims.

Plaintiffs claim that the effects of this practice harm people beyond those who have policies with UnitedHealth – it trickles out to the American taxpayer, they say. How? The claim is that in many cases, the coverage denial letters sent by UnitedHealth tells patients who qualify for Medicare that their claim is being denied due to their Medicare eligibility. The company then instructs these patients to enroll in the government-subsidized Medicare program instead of covering the care “for which they are contractually and statutorily obligated to cover."

In a broad sense, UnitedHealth is being accused of acting in its own economic self-interest and elevating its own needs over those of its policyholders. Legally, plaintiffs claim, the company has obligations under its contract with them as well as under statutes and common law to “have a doctor determine individual coverage for post-acute care in a thorough, fair, and objective manner" instead of using AI. They state in their complaint that by engaging in such “systematic, illegal, malicious, and oppressive" misconduct, the company breached the fiduciary duty it owed policyholders, including duties of “good faith and fair dealing."

The plaintiffs claim that the hospital has caused them to suffer injuries in the form of either out-of-pocket money lost or loss of health from forgoing treatment. They are asking the court to order the company to stop such unfair practices, and to compensate them with damages.

Case Contingent on Class Action Qualification

Notably, the plaintiffs emphasize how important it is that they be granted class status to bring the lawsuit. Class actions are generally more affordable than individual lawsuits for several reasons. For one, the costs of litigation are shared among all class members. This means that each individual class member does not have to bear the full cost of the lawsuit, which can be significant. Also, class action lawyers are often willing to take on cases on a contingency fee basis. This means that they will not charge any fees upfront, and they will only collect a fee if they are successful in the case. This can make it more affordable for individuals to pursue their claims.

Of course, there are also some potential drawbacks to class actions. For example, class action settlements may not provide as much compensation to individual class members as they might receive if they filed their own lawsuits. Additionally, class action lawsuits can be more complex and time-consuming than individual lawsuits. But, as the plaintiffs contend, few, if any, Class members could afford to seek legal remedies on their own. So, without a class action granted, they fear that no one will hold UnitedHealth accountable.

The case is in its earliest stages, so we will have to wait and see if the court grants the plaintiffs class status. At least some of the plaintiffs will likely be able to join together as a class or co-plaintiffs. From there, there's a long way to go to trial, during which United Health may just decide to settle out of court.

Related Resources

• Older Adult Law Resource Hub (FindLaw's articles for legal issues concerning the elderly)
• Can Your Boss Change Your Healthcare Benefits Without Telling You? (FindLaw's Learn About the Law)
• Employer Health Insurance Coverage Dropping Weight-Loss Drugs Like They're Carbs (FindLaw's Law & Daily Life)