What Happened
Families of two deceased Medicare Advantage beneficiaries filed a class action in Minnesota federal court alleging UnitedHealth used the nH Predict algorithm to cut off coverage for post-acute care that treating physicians deemed medically necessary. The complaint claims about 90% of the algorithm-driven denials were reversed on appeal, and that the company relied on the fact that only around 0.2% of patients ever appeal. UnitedHealth says the tool is a care-planning guide, not a coverage-decision engine.
Impact
Elderly patients were allegedly forced out of rehabilitation facilities prematurely, with some deaths cited in the complaint. The litigation survived early challenges, prompted broad discovery orders into UnitedHealth's AI use, and intensified regulatory scrutiny of algorithmic claim denials across the insurance industry.
How to Prevent This
- Require qualified clinician review before any AI-informed coverage denial takes effect
- Track appeal reversal rates as a production accuracy metric and halt use when they spike
- Prohibit managerial targets that tie staff performance to matching algorithmic predictions
- Disclose to patients when an algorithm influenced a denial and simplify the appeal path
- Audit algorithms against treating-physician judgments on a regular sample of cases