Speaking of medical debt news, a class action lawsuit was just filed in Federal Court in Minnesota alleging that United Healthcare – my supplemental Medicare provider – used an AI algorithm, “nH Predict,” to reject claims under Medicare Advantage policies for post acute-care payments. The suit claims that the AI model is faulty 90% of the time, incorrectly denying care to the claimants and to others in the class.  

To illustrate, a Medicare patient who is admitted to a hospital for a stroke for at least three days is entitled to up to 100 days of post-acute care in a rehab or skilled nursing facility. The length of stay within these guidelines is required to be determined by the patient’s physician. UnitedHealthcare is accused of cutting the rehab payments after, say an arbitrary 14 days per the nH Predict model, but falsely telling the patient that the discharge decision is due to Medicare rules. The company has set up targets for adherence to their AI model, and employees who deviate more than 1% from the model prediction are subject to being fired.

The suit further states that UnitedHealthcare knows that patients almost never dispute coverage decisions (they say disputes happen in only .02% of denials), and so the company simply pockets the premiums without paying for covered services. The company also saves money because use of the AI model eliminates the time and expense of individual review of coverage claims by medical professionals. How wonderful for them!

The actual text of the suit can be found here: https://tinyurl.com/bdhyhs4e. Please be aware that this case has not yet been adjudicated by the justice system, and therefore there is not yet a determination of guilt or innocence on the part of the defendant, United HealthCare Group, Inc. IMHO, there is no substitute for reading the actual text of the case, which I did. Note that many insurance claims under Medicare Advantage are paid promptly and in full; this suit only alleges a problem with a single provider where they are using a computer model in lieu of medical review of post-acute care needs.

The case is interesting for a couple of reasons. First, if the allegations are true, then a great many Americans who have chosen a Medicare Advantage plan are at risk of financial harm should they need this type of expensive care. The two plaintiffs each paid on the order of $150,000 out of pocket for post-acute care services that they say should have been covered by their insurance policy. Most Americans can’t afford to do this; either they let the patient die, or they deplete all of their assets and declare bankruptcy. These are bad things.

The second thing that is interesting here is that AI is being given a bad name. There is nothing special about an “artificially intelligent” computer vs a “traditionally intelligent” one in this case; at its heart, someone wrote a program that takes millions of prior cases and develops averages for how much they cost, based on a complex series of parameters. Length of stay decisions are then based on these averages instead of upon the individual medical situations. The authors of the model will likely claim that these averages are very good ones, but it doesn’t really matter since Medicare does not allow insurers to discharge based solely on a computer model of past cases.

And finally, this is an important case because whether UnitedHealthCare Group wins or loses, it would impact millions of American seniors. More than half of Medicare enrollees are currently in an Advantage plan, amounting to around 30 million people. If the insurance company prevails, it will be a green light to use secret computer programs to deny coverage to those people who would otherwise qualify for services under the law. If the insurance company loses, then the world of Medicare Advantage will fundamentally change in a good way for patients. I will stay tuned.