by Sara E. Teller

UnitedHealthcare is accused of illegally using artificial intelligence (AI) to override human decisions.

In a groundbreaking legal move, a potential class action lawsuit has been filed against the nation’s largest insurer, accusing it of illegally leveraging artificial intelligence (AI) programs to override medical professionals’ decisions. In doing so, the defendant is allegedly forcing seniors from nursing homes.

The case alleges that UnitedHealthcare, the defendant in question, used its nH Predict AI Model to terminate post-acute care coverage for Medicare Advantage beneficiaries, leading to a potential class that could include tens of thousands of plaintiffs with damages claims reaching billions of dollars.

The lawsuit, brought by the estates of Gene B. Lokken and Dale Henry Tetzloff, sheds light on the abrupt termination of their skilled nursing care coverage just days into their stays. Despite doctors advocating for further in-patient services, both appeals were denied, compelling the families to cover months of continued care out-of-pocket until the seniors’ unfortunate demise earlier this year.

According to court documents filed in the US District Court in Minnesota, the attorneys argue that UnitedHealthcare’s use of AI to determine coverage needs constitutes a breach of fiduciary duties, including good faith and fair dealing. The lawsuit contends that the insurer allowed its AI model to wholly determine coverage requirements, prioritizing its economic interests over those of the insureds.

Class Action Targets Insurer for Forcing Seniors from Nursing Homes
Photo by Andrea Piacquadio from Pexels

This legal action comes amid growing scrutiny of insurers employing AI in decision-making processes. Congress has addressed denial patterns, with STAT News unveiling investigations into the issue. Former UnitedHealthcare employees cited algorithm-based calculations influencing claims denials, even in cases involving seriously ill patients.

The Centers for Medicare & Medicaid Services (CMS) has taken steps to limit how Medicare Advantage (MA) insurers deny care, but these changes won’t take effect until January 1. Critics remain uncertain about the efficacy of the updated MA rule in prompting real change.

The recent lawsuit seeks to impact UnitedHealthcare financially, alleging a fraudulent scheme that benefits the insurer while prematurely displacing elderly individuals from care facilities or forcing them to deplete family savings to continue necessary medical care.

The legal document argues that the insurer’s AI model, by disagreeing with real-life doctors’ determinations, provides a financial windfall for UnitedHealthcare. This occurs through policy premiums without the corresponding fulfillment of promised care.

The plaintiffs’ lawyers emphasize that the elderly are bearing the brunt of this alleged fraudulent scheme, experiencing premature discharges from care facilities or exhausting savings due to the insurer’s reliance on an AI model that overrides medical professionals’ decisions.

The lawsuit accuses UnitedHealthcare of systematically denying claims using its AI model, knowing that a majority of policy holders won’t be appealing their denied claims. It was argued by the plaintiffs that most of these policy holders will bear out-of-pocket costs or sacrifice the remainder of their prescribed post-acute care due to impaired conditions, lack of knowledge, and limited resources to contest the AI-powered decisions.

UnitedHealthcare, with health insurance plans covering 52.9 million Americans, has yet to respond to the latest legal action concerning forcing seniors from nursing homes, maintaining its previous stance that the case lacks merit. The outcome of this lawsuit could have far-reaching implications, potentially reshaping the use of AI in insurance decision-making and its impact on vulnerable populations.


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