Legal Action Targets UnitedHealth's Alleged Misuse of AI, Concerns Around Denial of Elderly Care Claims

A proposed class action lawsuit filed against UnitedHealth Group Inc UNH claims that the company's use of an artificial intelligence algorithm systematically denies essential extended care for elderly patients. 

The lawsuit, filed in federal court in Minnesota, was brought by family members of two deceased UnitedHealth beneficiaries who were compelled to pay out of pocket for medically necessary care that the insurer refused to cover.

The plaintiffs aim to represent a nationwide class of individuals on Medicare Advantage insurance plans, administered by private health insurers like UnitedHealth but funded by the U.S. Medicare program.

The lawsuit specifically focuses on an AI algorithm called nH Predict, developed by NaviHealth Inc., a company acquired by UnitedHealth in 2020, Reuters noted. 

Allegedly, UnitedHealth relies on nH Predict to assess claims for post-acute care, including stays in skilled nursing facilities and in-home care, resulting in premature and bad-faith discontinuation of healthcare payments.

The complaint highlights that when these coverage denials are appealed to federal administrative law judges, approximately 90% of them are overturned, indicating the significant inaccuracy of the algorithm. 

Ryan Clarkson, founder of the law firm representing the plaintiffs, emphasized that only a fraction of patients appeal these denials, shedding light on the pervasive impact of UnitedHealth's practices.

The lawsuit contends that UnitedHealth's utilization of nH Predict violates patient contracts and insurance laws across multiple states by making claim decisions without adequate evaluation. 

It seeks a court order to halt this practice and financial compensation for affected individuals.

Price Action: UNH shares closed at $540.38 on Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.