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UnitedHealth Lawsuit: Can AI Deny Healthcare Services?

Two families sued the UnitedHealth Group last week, saying that this well-known insurance company is using artificial intelligence like naviHealth’s program, as cited in the lawsuit, to deny or shorten rehab stays for two men just months before they died. 

Insurance claims are typically addressed by professionals at insurance companies, but now, AI is making some of these important decisions. The lawsuit states that this emerging technology is making unrealistic calculations about what patients need for recovery from severe illness and is denying them access to coverage for skilled rehab centers that should be covered under Medicare Advantage plans. This lawsuit mentions that it is illegal to let AI programs override doctor recommendations for patients.

The families of these two men believe that the company is denying this care to elderly patients as a strategy since these patients do not fight back. Algorithms were used to determine coverage and override recommendations from healthcare professionals. Court documents report that over 90 percent of claim denials were overturned through internal appeals or a judge. Only .2 percent of patients decide to fight claim denials. This means most patients must pay out-of-pocket or go without their prescribed care.

UnitedHealth is denying these claims, asserting that naviHealth is not being used to determine coverage. They also stated that the decisions are based on the Centers for Medicare and Medicaid Services criteria and the consumer’s insurance plan.

Relatives of Gene B. Lokken report that in May 2022, 91-year-old Lokken fell in his home, breaking his leg and ankle. These injuries required a short stay at the hospital with physical therapy to regain strength and balance. He spent less than three weeks in treatment before the insurer terminated his coverage, recommending he be discharged and sent home to recover even after the physical therapist had described his condition as “paralyzed” and “weak.”

Despite the denial, his family decided to continue treatment, paying $12,000 to $14,000 per month for a year of therapy. Lokken died in July 2023 at the treatment facility.

The other man, Tetzloff, who was 74, was recovering from a stroke in October 2022, and doctors recommended that he be transferred from a hospital to a rehab facility for at least 100 days. Initially, the insurance company wanted to end coverage after just 20 days, but the family appealed, and his stay was extended another 20 days.

While Tetzoff’s doctor had recommended additional physical and occupational therapy, his coverage ended after those 40 days, with the family having to spend $70,000 on his care for the next ten months of treatment. Tetzloff died on October 11 in an assisted living facility.

The Center for Medicare Advocacy has examined multiple insurers’ use of AI programs in rehab and home health settings. In their report, the group concluded that these programs often made far more restrictive decisions than what Medicare would allow. They also say that the AI program could not provide the level of nuance necessary for evaluating unique circumstances in each case.

The associate director and senior policy attorney for the Center for Medicare Advocacy, David Lipschutz, weighed in, citing an example of a Connecticut woman seeking a three-month stay at a treatment center while recuperating from a hip replacement surgery. This woman had filed and won 10 appeals after the insurance company attempted to terminate coverage. 

Even legal experts who have no involvement in the cases have said that artificial intelligence is becoming a huge target for people and organizations seeking to shape the use of emerging technology to their advantage. Attorneys like Gary Merchant, who is the faculty director at the Center for Law, Science, and Innovation at Arizona State University’s Sandra Day O’Connor College of Law, are making the point that while these AI systems can effectively complete rudimentary tasks quickly, the programs on their own can make mistakes.

The UnitedHealth lawsuit states the company limited the worker’s “discretion to deviate” from the program’s algorithms. Employees who went against the AI program’s projections faced discipline or were terminated.

Merchant reminds companies that it is important to consider the consequences of how these insurance companies are setting up their automated systems, think about how much deference they are giving to the algorithm, and be aware that these systems are fallible.

As a reputable health management company, we understand the importance of accurate insurance claim decisions and allowing patients to access vital treatment. Our dedicated team works diligently to advocate for patients, striving to navigate the intricacies of insurance procedures and regulations. Every individual deserves quality healthcare and a supportive and streamlined journey through the financial aspects of their medical care.