UnitedHealth uses AI model with 90% error rate to deny care, lawsuit alleges - Ars Technica
By: Patrick Fallon (Ars Technica)
This article is from 2023, but keep your eye on this as the motive for the killing of the CEO gets unearthed.
The suspect is described as an AI expert.
S E E D E D C O N T E N T
For the largest health insurer in the US, AI's error rate is like a feature, not a bug.
Beth Mole - Nov 16, 2023 6:37 pm | 243 UnitedHealthcare (UHC) health insurance company signage is displayed on an office building in Phoenix on July 19, 2023. Credit: Getty | Patrick Fallon UnitedHealthcare (UHC) health insurance company signage is displayed on an office building in Phoenix on July 19, 2023. Credit: Getty | Patrick Fallon Text settingsStory text Size Small Standard Large Width * Standard Wide Links Standard Orange * Subscribers only
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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."
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.
Listing image: Getty | Patrick Fallon
Beth MoleSenior Health ReporterBeth MoleSenior Health Reporter Beth is Ars Technica's Senior Health Reporter. Beth has a Ph.D. in microbiology from the University of North Carolina at Chapel Hill and attended the Science Communication program at the University of California, Santa Cruz. She specializes in covering infectious diseases, public health, and microbes. 243 Comments
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UnitedHealthcare accused of relying on AI algorithms to deny Medicare Advantage claims
Democrats on a Senate subcommittee are accusing UnitedHealthcare Group of denying claims to a growing number of patients as it tried to leverage artificial intelligence to automate the process.
In an October report, "How Medicare Advantage Insurers Have Denied Patients Access to Post-Acute Care," Democrats on the U.S. Senate Permanent Subcommittee on Investigations (PSI) released a report claiming UnitedHealthcare’s prior authorization denial rate for post-acute care jumped from 10.9% in 2020 to 22.7% in 2022.
Denial rates for skilled nursing centers, in particular, "experienced particularly dramatic growth." The number of denied claims in 2022 was nine times higher compared to 2019, according to the report.
During this same period of time, the company "implemented multiple initiatives to automate the process," according to the report.
UNITEDHEALTHCARE CEO FATALLY SHOT OUTSIDE MANHATTAN HOTEL IN 'TARGETED' ATTACK; SUSPECT AT LARGE
The report also claimed United "processed far more home health service authorizations for Medicare Advantage members during this period, underscoring concerns about insurers rejecting placements in post-acute care facilities in favor of less costly alternatives," the report said.
FOX Business reached out to United for comment. In a statement issued in October, the company lambasted the report, saying it "mischaracterizes the Medicare Advantage program and our clinical practices, while ignoring CMS criteria demanding greater scrutiny around post-acute care."
The report surfaced as the largest health insurance company has come under fire for allegedly wrongfully denying claims in recent months. The murder of UnitedHealthcare CEO Brian Thompson in New York on Wednesday prompted more critics to air their frustrations with the company.
A UnitedHealthcare sign is displayed outside a store in the Queens borough of New York Jan. 14, 2013. Getty Images© Michael Nagle/Bloomberg via Getty Images
According to the PSI's report, a UnitedHealthcare committee approved using "Machine Assisted Prior Authorization" to speed up the process of reviewing medical requests in April 2021. The committee was told doctors or nurses still had to verify the evidence, but testing showed the technology could cut review time by 6-10 minutes, the report said.
UnitedHealthcare tested a new "HCE Auto Authorization Model" in early 2021, and internal meeting notes revealed that it produced "faster handle times" for cases. But there was also an increase in the number of cases that were denied due to the system catching errors that were missed in the original review, according to the report. The report said the committee voted to tentatively approve the model at a meeting a month later.
In December 2022, a UnitedHealthcare group explored how to use AI and "machine learning" to predict which denials of post-acute care cases were likely to be appealed and which of those appeals were likely to be overturned.
Nearly a year later, in November 2023, the nation's largest insurance company was hit with a class-action lawsuit accusing it and its subsidiary, NaviHealth, of relying on a computer algorithm to "systematically deny claims" of Medicare beneficiaries in nursing homes that had struggled to recover from debilitating illnesses.
The suit claimed the company illegally deployed "artificial intelligence (AI) in place of real medical professionals to wrongfully 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."
The suit also claimed the company knew this model "has a 90% error rate."
The suit continued arguing that despite the high error rate, the company and its subsidiary "continue to systemically deny claims using their flawed AI model" because they know that only about 0.2% of policyholders will actually appeal denied claims and that the vast majority will either pay out-of-pocket costs or forgo the remainder of their prescribed post-acute care.
"Defendants bank on the patients’ impaired conditions, lack of knowledge, and lack of resources to appeal the erroneous AI-powered decisions," the suit continued.
The suit was filed shortly after an investigation by Stat News found that UnitedHealth pressured employees to use an algorithm that was aimed at cutting off rehab care for Medicare patients.
The investigation found that the algorithm predicted the patient’s length of stay to deny payments for individuals with Medicare Advantage plans.
Original article source: UnitedHealthcare accused of relying on AI algorithms to deny Medicare Advantage claims
Insurance are there to make money, PERIOD and denying coverage is the quickest way to pad the bottom line. That is a fact, they are not in the business to lose money.
Morning..you sure do have a strange medical system over there..
Here pay private health insurance you are covered full stop for what ever procedure and they can't deny you anything..
You will probably cop some out of pocket expenses because the surgeon, anesthetist charges more than the government schedule fee but that's it..
I use to have private health insurance but dropped it and went public which means no health insurance and the government pays for everything..
So far my health needs, 3 week stay in top Melbourne Hospital, all the treatments, chemo, radiation tablets that cost $20,000 a month free..
My total bill so far would have to be around $600,000 have not paid one cent...and for that I am most grateful..
The only advantage of private health insurance is a shorter wait to get into a hospital sometimes...
So far I have got into hospitals within a few weeks and it was shorter than people paying private health insurance..
For a colonoscopy 2.5 week wait, for an op last year was 4 weeks and because there was unexpected complication another surgeon had to be called in.. everything again was free.. hospital 4 days, anesthetist and two surgeons..no charge...
You really haven't checked into insurance companies' loss ratios have you.
No, the quickest way is to charge the appropriate premium for the risk.
You are defending the common practice of over-denying claims by insurance companies??
I have Goose, but let’s clear up one thing before we proceed I am talking about as is the article health insurance, specifically United Healthcare.
As a resident I’m more than familiar with the loss aspect. Florida is a a world of hurt now since numerous insurance companies have pulled out of the auto and property section because of losses.
On the other hand none have pulled out of the health care insurance end of the business. The company being discussed, UHC had a profit in 2023 of $22 billion dollars so their loss ratio wasn’t bad at all, ya think? Revenue were $372B.
what we appear to have here is data overruling the opinions of the patients doctors
does that sound good or fair to you?
The loss ratios for health insurers are set by federal statute. That's not just FL, that's everywhere.
Medicare does that all the time. The difference is that the docs all know it ahead of time, so they don't argue.
I’m aware that it is set by federal statue. The point being that when you talk insurance companies it is best to be specific, since it seemed that Goose used all insurance companies.
Actually their profit was $22 B. For 2023
How in the fuck did you come to that conclusion?
6%, do you complain about Apple, Google, Microsoft or any company for making a 6% or higher profit? I don't care for health care company claims practices at all but, I never hear people screaming about the crazy cost of medical care just the insurance cost.
Then you aren't paying attention. A week doesn't go by when I don't see an article about how someone got screwed on their medical billing.
JR, I don't know what to make of this the "headline", it would make someone think United Heatlh Care denies 90% of its claims and I don't believe that is the case, I don't like healthcare companies, but they are not normally that bad.
From what you wrote:
Do you know what a Loss Ratio is? Are you aware insurance companies use actuaries to set their pricing for a risk. Do either of these topics have anything to do with deny claims?
That is what the headline means.
Yes, I am quite aware of these factors.
Are you attempting to imply that you are NOT trying to defend over denying of claims by insurance companies?
Not implying that at all, I don't defend claims practices of insurance carriers, I've been fighting them for over 45 years!
I will assume this is true unless you contradict it in the future.
I will assume you can read unless you contradict it in the future.
Would you prefer I not take you at your word?
so all this justifies murder in progressives' minds?
I'm sure they would have responded the same way if someone impacted by the negative changes Obamacare caused murdered Obama or anyone who voted for it.
what justifies using a system with a 90% fail rate to deny health care coverage ?
Nothing a lawsuit couldn't settle.
That’s BS.
Where the hell did you come up with that?
This article just offers up a possible motive. Nothing else!
Reading all sorts of justifications and celebrations of the murder from progressives.
Bullshit! You are reading what you want into the articles. Nothing more!
First of all, no one said that. Second, why do you need to be progressive to have a beef with some part of the healthcare industry?
Plenty, have in fact, justified the murder.
You don't. But the overwhelming majority of people either outright celebrating/justifying it or playing the mealy mouthed "I Don't support murder, BUT" game are, in fact, progressives.
Define “justified” for me. Did these people say the shooter shouldn’t be prosecuted?
"Deeply flawed algorithm" and use of AI is just the beginning. Wait until Musk, Ramaswamy, RFK, and the human destructive policies begin on Medicare, Medicaid, ACA and the push to also privatize Veterans Healthcare. Medicare "Advantage" plans hurt more elderly patients than they help. Now the plan from unelected Trump appointees is to tear it all down so more private insurance companies than ever can ramp up their profits while denying even more care. All so Republican elected officials can profit on their own stock portfolios. We do little to nothing to hold elected officials from cashing in on inside knowledge or cashing in on terrible policies they pass to enrich themselves.
Whatever we do, we absolutely must NOT research something known as the "MLR". We must certainly not reverse engineer the math on the MLR.
Nothing to see here. Move along. This is the restricted section of the library.
Why not an important part of the business and ACA. UHC for 2023 was 83% which required a rebate to clients based on ACA rules.
Why not? Because if you do the math you are faced with the horrific and inescapable realization that the more an insurer pays in claims the more profit it is allowed to keep.
This will then completely undermine the approved presumption that denying claims = higher profits and force people to actually think. Nobody wants that.
It will also expose the Affordable Care Act as a shining example of why we shouldn't let politics majors write legislation where math is involved.
It's not an assumption it's a fact. They did it before the ACA and have now been caught doing it again.
What is a fact, exactly?
My ‘’why not’’ was in response to your comment ‘’ we must not research something known as the MLR’’.
85% is the federal statue that the insurance companies have to invest in care, UHC was at 83% so by federal statue they had to refund the 2% back to the company.
If the more the company pays in claims the more profit they are allowed to keep, if for example UCH paid more in claims that would go against there increased profit would you end up in a push or not. I believe that is why there is a minimum that they have to re invest in client care.
I’m not feeling sorry for the insurance companies, it’s a business that is like many other businesses and that is to make a profit. How much profit is the question and what ‘’tricks’’ are they using to get there.
Simply put, and we all know this, if UHC wasnt making more profit by rejecting claims they wouldnt be encouraging it and doing it.
What machinations of federal regulation they use (or bypass) to get there is irrelevant to this seed.
"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"
MLR math works both ways.
If they don't pay enough claims, they have to give back profits, as you describe. Profits are now directly correlated to how much they pay out in claims. (5.67 to 1, or 4-1 for small employer and marketplace plans). So this idea that they are denying claims to increase profitability is pre iPhone thinking.
The potential profit gain in question comes from fewer salaries.
If the law suits are true, UHC has a 90% error factor using AI. Overall they are at a 32% decline rate which is twice the industry average, one has to wonder why these numbers are so high, does it not?
Remember, I’m well before pre iPhone thinking actually closer to Smoke Signal thinking which is close to KISS thinking, if something doesn’t smell quite right start turning over the rocks.
Lawsuits being what they are, the accusations are almost surely embellished.
But yeah, using the KISS method, you look for motive. What do they stand to gain? The law doesn't let them profit from denials, so how do they profit from an AI tool? Probably the same way everyone else does, by using it to replace workers.