UnitedHealth Group Faces Lawsuit Over Flawed AI Algorithm

A class-action lawsuit against UnitedHealth Group has been quietly making its way through federal court in Minnesota, but recent social media posts have blown it out of proportion. The case revolves around nH Predict, an AI algorithm used by UnitedHealthcare and its subsidiary naviHealth to determine the length of post-acute care for patients.

The algorithm is accused of having a 90% error rate, with roughly 90% of denials being overturned when patients appealed, but only about 0.2% of patients ever appealing in the first place. This has left many families paying out-of-pocket or going without continued care, including the Lokken family who paid around $220,000 for Gene B. Lokken's post-acute care after his rehab was cut short by the algorithm.

The lawsuit also highlights a potential conflict of interest between AARP and UnitedHealthcare, as AARP licenses its name to UnitedHealthcare and collects royalties on Medicare plans that carry it. The case has implications beyond Minnesota, with three major insurers - UnitedHealth Group, Humana, and Cigna - defending algorithmic-denial suits at the same time.

While some have raised concerns about the accuracy of nH Predict, a magistrate judge has ordered UnitedHealth to turn over information about how the algorithm was built, its design, and the cost savings that drove the naviHealth deal. The case has the potential to expose bad-faith practices by insurers and could have significant implications for Medicare Advantage members.