The Estates of two individuals filed a lawsuit against UnitedHealthcare (to include UnitedHealth Group, Inc., UnitedHealthcare, Inc., naviHealth, Inc., and Does 1-50) over the alleged use of an artificial intelligence (AI) program in the claims authorization/denial process. The lawsuit, filed by the Estate of Gene B. Lokken and the Estate of Dale Henry Tetzloff, alleges that UnitedHealthcare illegally used AI “in place of real medical professionals to deny elderly patients care owed to them under Medicare Advantage Plans by overriding their treating physicians’ determinations as to medically necessary care based on an AI model that [UnitedHealthcare] know has a 90% error rate.”
The lawsuit, as noted above, was filed on behalf of two deceased UnitedHealthcare Medicare Advantage beneficiaries. Lokken and Tetzloff allegedly did not receive appropriate post-acute coverage after major medical events. The lawsuit is seeking class-action status, to represent others who are impacted by UnitedHealthcare’s alleged care denials using AI.
Lokken was a 91-year-old Medicare beneficiary who fractured his leg and ankle in Spring 2022 during a fall. He was admitted to a skilled nursing facility to help him recover. However, UnitedHealth cut Lokken’s coverage for such a facility after just two and a half weeks – against the advice of his treating physicians. His family was then forced to pay out-of-pocket for his care at the facility, to the tune of up to $14,000 per month, until Lokken passed away the following year.
The lawsuit alleges that, “The elderly are prematurely kicked out of care facilities nationwide or forced to deplete family savings to continue receiving necessary medical care, all because [UnitedHealth’s] AI model ‘disagrees’ with their real live doctors’ determinations.”
The lawsuit goes on to allege that UnitedHealthcare “systemically den[ies] 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.” This helps UnitedHealthcare obtain “a clear financial windfall in the form of policy premiums without having to pay for promised care.”
Additionally, the lawsuit alleges that UnitedHealthcare “intentionally limit[s] their employees’ discretion to deviate from the nH Predict AI Model predication by setting up targets to keep stays at skilled nursing facilities within 1% of the days projected by the AI Model” and employees who “deviate from the nH Predict AI Model projections are disciplined and terminated, regardless of whether a patient requires more care.”
Defendant Responses
UnitedHealthcare rejects the lawsuit, saying that it “has no merit” and promising to “defend ourselves vigorously.”
Aaron Albright, a spokesperson for NaviHealth told CBS MoneyWatch that the AI-powered tool is not used to make coverage determinations but as “a guide to help [UnitedHealth] inform providers … about what sort of assistance and care the patient may need” and that coverage decisions are “based on CMS coverage criteria and the terms of the member’s plan.”
Not the Only Case Like This
The law firm that filed the lawsuit against UnitedHealthcare also filed a lawsuit against Cigna in July 2023, alleging that Cigna used an algorithm to deny claims. Cigna is facing a similar lawsuit in Connecticut as well.
About a month after the UnitedHealthcare lawsuit, a similar lawsuit was filed against Humana.