Algorithm Sued for Denying Care for Medicare Members

AI vs. AI –

Nov. 15, 2023 – The lawsuit alleges that the health insurer and its subsidiary, NaviHealth, used an algorithm called nH Predict to systematically deny medical claims from patients recuperating from illnesses in nursing homes.

UnitedHealth and other NaviHealth clients, including health insurer Humana, used nH Predict to deny claims, despite the algorithm having a steep error rate, plaintiffs allege. More than 90% of patient claim denials from nH Predict were overturned following appeal, according to the suit.

UnitedHealth has used the tool since at least 2019. It acquired NaviHealth the following year.

The suit accuses UnitedHealth of breaking state law in more than 20 jurisdictions and breaching its contracts with members, resulting in unjust enrichment.

High levels of denials mean payers don’t have to pay for as many medical claims and can retain more money as profit, especially since almost no one appeals denied claims. A KFF analysis found members appealed only 0.2% of denials in 2021. In addition, payers can save labor costs by not having to pay doctors to conduct a manual, individualized review of claims to determine coverage, according to the suit.