UnitedHealth uses AI model with 90% error rate to deny care, lawsuit alleges
"For the largest health insurer in the US, AI's error rate is like a feature, not a
bug.
BETH MOLE – NOV 16, 2023
UnitedHealthcare, the largest health insurance company in the US, is allegedly
using a deeply flawed AI algorithm to override doctors' judgments and
wrongfully deny critical health coverage to elderly patients. This has resulted in
patients being kicked out of rehabilitation programs and care facilities far too
early, forcing them to drain their life savings to obtain needed care that should
be covered under their government-funded Medicare Advantage Plan.
That's all according to a lawsuit filed this week in the US District Court for the
District of Minnesota. The lawsuit is brought by the estates of two deceased
people who were denied health coverage by UnitedHealth. The suit also seeks
class-action status for similarly situated people, of which there may be tens of
thousands across the country.
The lawsuit lands alongside an investigation by Stat News that largely backs
the lawsuit's claims. The investigation's findings stem from internal documents
and communications the outlet obtained, as well as interviews with former
employees of NaviHealth, the UnitedHealth subsidiary that developed the AI
algorithm called nH Predict.
"By the end of my time at NaviHealth I realized: I'm not an advocate, I'm just a
moneymaker for this company," Amber Lynch, an occupational therapist and
former NaviHealth case manager, told Stat. "It's all about money and data
points," she added. 'It takes the dignity out of the patient, and I hated that."
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AI-based denials
According to the lawsuit, UnitedHealth started using nH Predict in at least
November 2019, and it is still in use. The algorithm estimates how much post-
acute care a patient on a Medicare Advantage Plan will need after an acute
injury, illness, or event, like a fall or a stroke. Post-acute care can include things
like therapy and skilled care from home health agencies, skilled nursing homes,
and inpatient rehabilitation centers.
It's unclear how nH Predict works exactly, but it reportedly estimates post-
acute care by pulling information from a database containing medical cases
from 6 million patients. NaviHealth case managers plug in certain information
about a given patient—including age, living situation, and physical functions—
and the AI algorithm spits out estimates based on similar patients in the
database. The algorithm estimates medical needs, length of stay, and
discharge date.
But Lynch noted to Stat that the algorithm doesn't account for many relevant
factors in a patient's health and recovery time, including comorbidities and
things that occur during stays, like if they develop pneumonia while in the
hospital or catch COVID-19 in a nursing home.
According to the Stat investigation and the lawsuit, the estimates are often
draconian. For instance, on a Medicare Advantage Plan, patients who stay in a
hospital for three days are typically entitled to up to 100 days of covered care in
a nursing home. But with nH Predict, patients rarely stay in nursing homes for
more than 14 days before receiving payment denials from UnitedHealth.
When patients or their doctors have requested to see nH Predict's reports,
UnitedHealth has denied their requests, telling them the information is
proprietary, according to the lawsuit. And, when prescribing physicians
disagree with UnitedHealth's determination of how much post-acute care their
patients need, their judgments are overridden.
Favorable failings
The use of faulty AI is not new for the health care industry. While AI chatbots
and image generators are currently grabbing headlines and causing alarm, the
health care industry in the US has a longer record of problematic AI use,
including establishing algorithmic racial bias in patient care. But, what sets this
situation apart is that the dubious estimates nH Predict spits out seem to be a
feature, not a bug, for UnitedHealth.
Since UnitedHealth acquired NaviHealth in 2020, former employees told Stat
that the company's focus shifted from patient advocacy to performance
metrics and keeping post-acute care as short and lean as possible. Various
statements by UnitedHealth executives echoed this shift, Stat noted. In
particular, the UnitedHealth executive overseeing NaviHealth, Patrick Conway,
was quoted in a company podcast saying: "If [people] go to a nursing home,
how do we get them out as soon as possible?"
The lawsuit argues that UnitedHealth should have been well aware of the
"blatant inaccuracy" of nH Predict's estimates based on its error rate. Though
few patients appeal coverage denials generally, when UnitedHealth members
appeal denials based on nH Predict estimates—through internal appeals
processes or through the federal Administrative Law Judge proceedings—over
90 percent of the denials are reversed, the lawsuit claims. This makes it
obvious that the algorithm is wrongly denying coverage, it argues.
But, instead of changing course, over the last two years, NaviHealth employees
have been told to hew closer and closer to the algorithm's predictions. In 2022,
case managers were told to keep patients' stays in nursing homes to within 3
percent of the days projected by the algorithm, according to documents
obtained by Stat. In 2023, the target was narrowed to 1 percent.
And these aren't just recommendations for NaviHealth case managers—they're
requirements. Case managers who fall outside the length-of-stay target face
discipline or firing. Lynch, for instance, told Stat she was fired for not making
the length-of-stay target, as well as falling behind on filing documentation for
her daily caseloads.
In an emailed statement, UnitedHealth's subsidiary Optum Health told Ars:
The naviHealth predict tool is not used to make coverage determinations. The
tool is used as a guide to help us inform providers, families and other caregivers
about what sort of assistance and care the patient may need both in the facility
and after returning home. Coverage decisions are based on CMS coverage
criteria and the terms of the member’s plan. This lawsuit has no merit, and we
will defend ourselves vigorously.
Ultimately, case managers do not decide on coverage or denials—those
decisions fall to NaviHealth's physician medical reviewers. But, those
physicians are advised by the case managers, who are held to the 1 percent
target.
And case managers are specifically trained to defend the algorithm's estimate
to patients and their care providers. One training document obtained by Stat
discussed the blunt tactics case managers were told to take when patients and
caregivers pushed back on denials. It stated:
If a nursing home balked at discharging a patient with a feeding tube, case
managers should point out that the tube needed to provide "26 percent of daily
calorie requirements" to be considered as a skilled service under Medicare
coverage rules.
If a nurse took a broader tack, and argued a patient was unsafe to leave, case
managers were instructed to counter, in part, that the algorithm's projections
about a patient's care needs, and readiness for discharge, are based on a
"severity-adjusted" comparison to similar patients around the country. "Why
would this patient be any different?" the document asks.
No winning
Even for the patients who appeal their AI-backed denials and succeed at
getting them overturned, the win is short-lived—UnitedHealth will send new
denials soon after, sometimes within days.
A former unnamed case manager told Stat that a supervisor directed her to
immediately restart a case review process for any patient who won an appeal.
"And 99.9 percent of the time, we're going to turn right back around and issue
another [denial]," the former case manager said. "Well, you won, but OK, what'd
that get you? Three or four days? You’re going to get another [denial] on your
next review, because they want you out."
The plaintiffs leading the proposed class-action suit include the family of Gene
Lokken, who died on July 17 of this year. On May 5 2022, the 91-year-old fell at
home, fracturing his leg and ankle. After around six days in the hospital, he was
moved to hospice care, where he spent a month recovering from his injuries.
After that, doctors said he became well enough to start physical therapy. But
UnitedHealth only paid for 19 days of therapy, dumbfounding his doctors and
therapists, who described his muscle functions as "paralyzed and weak." The
family appealed the denial, but their appeal was rejected. The rejection letter
UnitedHealth sent the family said additional physical therapy was unneeded
because there were no acute medical issues, and he was self-feeding and
required minimal help for hygiene and grooming.
The family had no choice but to pay out of pocket for his therapy, spending
around $150,000 until his death.
The other plaintiff is the family of Dale Tetzloff, who suffered a stroke on
October 4, 2022, and was admitted to a hospital. While there, the 74-year-old's
doctors referred him to a skilled nursing home and determined he would need
at least 100 days of post-acute care. But, after 20 days at the skilled nursing
home, UnitedHealth denied further coverage.
His family appealed the denial, twice, overturning it on the second appeal after
NaviHealth doctors reviewed Tetzloff's medical records. But, after 40 days at
the skilled nursing home, UnitedHealth denied coverage again and refused to
provide a reason. The family continued trying to appeal the denial, but were
unsuccessful. Meanwhile, they paid $70,000 out of pocket over about 10
months. In June, 2023, he was moved to an assisted living facility, where he
died on October 11.
The lawsuit accuses UnitedHealth and NaviHealth of breach of contract,
breach of good faith and fair dealing, unjust enrichment, and insurance law
violations in many states. It calls for actual damages, damages from emotional
distress, disgorgement and/or resititution, and an end to the AI-based claims
denials.
It’s unclear how much UnitedHealth saves by using nH Predict, but Stat
estimated it to be hundreds of millions of dollars annually. In 2022,
UnitedHealth Group’s CEO made $20.9 million in total compensation. Four
other top executives made between about $10 and $16 million each.
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