A class action lawsuit filed against Minnetonka-based UnitedHealth Group alleges the company is using a faulty artificial intelligence algorithm to deny coverage for Medicare patients’ rehabilitation care. The complaint, filed in the U.S. District Court of Minnesota after an investigation by STAT, claims that the algorithm has a 90% error rate, resulting in wrongful denials of coverage for patients who need post-acute care. The lawsuit argues that UnitedHealth Group’s use of AI overrides treating physicians’ determinations of medically necessary care for the elderly enrolled in Medicare Advantage plans.
The lead plaintiffs in the case are families of two patients from Wisconsin who faced significant out-of-pocket costs after their coverage for post-acute care was denied. The lawsuit also alleges that UnitedHealth Group limits its workers’ ability to deviate from the AI projections, with employees who fail to follow the model facing discipline or termination. The complaint further claims that the company is motivated by a financial windfall at the expense of providing necessary care to elderly patients.
UnitedHealth Group has defended its practices, stating that the AI model is used to guide care decisions rather than make coverage determinations. The company also stated that coverage decisions are based on federal coverage criteria and the terms of the member’s plan. The lawsuit, however, contends that the flawed AI model continues to be used because few patients typically appeal health insurance denials, leaving affected individuals with no choice but to pay out-of-pocket or forego prescribed care.
