UnitedHealth, the largest health insurance company in the US, is facing serious allegations over AI in their decision-making process.

A lawsuit filed in the US District Court in Minnesota claims that use of a flawed AI algorithm that allegedly overrides doctors’ judgments has led to patients being prematurely removed from rehabilitation programs, forcing them to deplete their life savings for necessary care that should be covered under their government-funded Medicare Advantage Plan.

The lawsuit, brought by the estates of two deceased individuals who were denied health coverage by UnitedHealth, seeks class-action status for potentially tens of thousands of similarly affected people across the country. The claims made in the lawsuit are supported by an investigation which obtained internal documents and interviews with former employees of NaviHealth, the UnitedHealth subsidiary responsible for the AI algorithm known as nH Predict.

The nH Predict algorithm estimates the post-acute care needs of patients on Medicare after a injury, illness, or event. It uses data from a database containing medical cases from 6 million patients to provide estimates based on factors such as age, living situation, and physical functions. However, the algorithm has been criticized for ignoring realistic needs of recovery, leading to estimates that often fall short of actual needs.

The lawsuit alleges that patients or their doctors who requested to see nH Predict’s reports were denied access. When physicians disagreed with UnitedHealth’s determination, their judgments were reportedly overridden. The lawsuit says that UnitedHealth is aware of the algorithm’s inaccuracy, given a high rate of appeal reversals.

Former employees claim that since UnitedHealth acquired NaviHealth in 2020, the focus shifted from patient advocacy to meeting performance metrics and minimizing post-acute care time and costs. The lawsuit accuses UnitedHealth and NaviHealth of breach of contract, breach of good faith and fair dealing, unjust enrichment, and insurance law violations, and seeks damages and an end to AI-based claims denials, highlighting the potential savings for UnitedHealth, estimated to be hundreds of millions of dollars annually. As the legal battle unfolds, questions arise about the use and accountability of AI in critical healthcare decisions.