As UnitedHealth and Cigna are Sued for AI-Based Claims Denials, Documents Suggest Major AI Expansion

In November 2023, UnitedHealth was sued for improperly denying claims using an artificial intelligence algorithm, nH Predict, that critics say has a 90% error rate. The result, which impacts patients with Medicare Advantage, was that people who needed care didn’t get it — or they had to pay exorbitant fees.

Now, a HEALTH CARE un-covered review of UnitedHealth’s filings with the government suggests that the $460 billion firm is set to substantially expand its use of AI, in spite of the lawsuit. The result could be more black-box algorithms that deny care when patients need it most — all at the service of UnitedHealth’s bottom line.

“We anticipate that fast-evolving AI/ML [artificial intelligence/machine learning] technologies, including generative AI, will play an increasingly important role in our information systems and customer-facing technology products,” UnitedHealth noted in its most recent annual report filed with the Securities and Exchange Commission, released in February. The filing also says that, “As an enterprise, we increasingly rely on new and evolving technologies, including those powered by or incorporating AI/ML, as part of our internal operations and in the delivery of our products and services.”

UnitedHealth’s disclosure that it will “increasingly rely” on artificial intelligence is new: the prior year’s annual report contains no similar statements. Cigna, which was sued for similar care denials in August 2023, also had its first significant AI disclosure in this year’s annual report, where it stated that it uses AI to “to analyze data and uncover patterns and insights,” and that they “anticipate rapidly adapting and capitalizing on new opportunities in an increasingly competitive and fast-changing digital landscape.”

Disclosures show that Cigna and UnitedHealth began lobbying on artificial intelligence issues at the federal level for the first time in the first quarter of 2024. Avenue Strategies, working on behalf of UnitedHealth, specifically stated in a filing that it was lobbying on “Issues related to the use of AI and it's [sic] correlation to prior authorization and utilization management policies.”  Records additionally show that UnitedHealth has lobbied against a California bill, SB 1120, that would limit the use of AI without medical supervision. 

On an earnings call in July 2023, three months after the initial STAT News investigation, UnitedHealth’s then-COO, Dirk McMahon stated:

[W]e've really been applying a lot of artificial intelligence, machine learning and natural language processing. Long-term, we think there's great hope for those. And some of the short-term things that we're working on in those areas, like using generative AI to help more efficiently write medical appeal letters.

Can’t stop, won’t stop

What the disclosures indicate is that in spite of sustained criticism, UnitedHealth and Cigna are planning to double-down on their use of AI.

For advocates like Christine Huberty, a Wisconsin legal aid attorney, who testified before Congress on the dangers of using AI to automate claims determinations, the use of AI to determine denials for long-term care has been a disaster.

“People who are in hospitals and are hospitalized for a range of issues oftentimes need to transfer to a skilled nursing facility before going home,” Huberty said, whether it’s for rehab or for nursing care. “Medicare Advantage plans contract with Navihealth” — the UnitedHealth subsidiary which produced nH Predict and has now been rebranded as Home and Community Care. The AI-driven algorithm then dictates the amount of days of skilled nursing care a patient can receive. The results, Huberty said, are “very rarely actually shared with patients. Every once in a while a social worker would see it, not consumers.”

Patients “think that the Medicare Advantage plan will cover the max days,” which is 100 days in a skilled nursing facility under traditional Medicare. But instead, “You have people who are automatically put into a state of panic,” because they’re told they have to leave the nursing home in two days, or begin privately paying, “even though none of the doctors or therapists would have come up with a safe discharge plan. It’s a state of panic for a family.”

A patient attempting to recover is thrown into an appeals process that can last months, she said. “The patient is in charge of proving that they need the care.”

As UnitedHealth faced public reproach for its use of AI to improperly deny care in the aftermath of STAT News’ March 2023 investigation, not only was Navihealth rebranded, but UnitedHealth abandoned some of the worst practices, according to Huberty. “They changed some of their automatic processes. There are not as many denials issued automatically. They no longer had the directive to churn out denials.”

Huberty said the use of AI in making care determinations needs to be eliminated altogether.

“The algorithm needs to stop being used in the first place. It’s a self-fulfilling algorithm — it reduces care time which changes the algorithm to indicate that patients need less care time. There shouldn't be this predicted discharge date in the first place. To automate this type of care and this type of coverage care is ridiculous.”

The lawsuit against UnitedHealth is led by the estates of Gerald Lokken of Bradley, Wisconsin, and Dale Henry Tetzloff, of Plover, Wisconsin. (Both were originally represented by Huberty.) According to the complaint, on May 5, 2022, Lokken, then 91 years old, fell at his house and broke his leg and ankle. Initially, Lokken was admitted to hospice due to his limited recovery. After a month in hospice, he began to recover with physical therapy. Then, using its proprietary AI algorithm, the complaint alleges, UnitedHealth cut off his care. The complaint states that the denial “dumbfounded Mr. Lokken and his treating physician because Mr. Lokken was still recovering from the fall and had only been receiving physical therapy for two and a half weeks.”

After UnitedHealth denied Lokken’s appeal, he and his family had to spend $12,000 to $14,000 a month on skilled nursing care until his death a year later, in July 2022.

The other patient in the case, Dale Henry Tetzloff, had a stroke on October 4, 2022, at 74 years old. At discharge, his doctor recommended he get more than 100 days of skilled nursing care. At 40 days, he was denied via UnitedHealth’s AI algorithm, and he and his wife incurred $70,000 in out-of-pocket medical expenses. Eventually he was discharged to an assisted living facility. He died one year and seven days after his stroke.

In May, as the lawsuit progressed, STAT reported that UnitedHealth was seeking to get the lawsuit thrown out because the estates had failed to exhaust the backlogged and complex Medicare administrative appeals process.

John Ayers, an epidemiologist at University of California San Diego who has studied AI’s role in health care, said that the use of AI in insurance decisions can leave patients without tools to advocate for themselves.

“On one hand, AI could potentially streamline the claims process and reduce errors, making it easier for patients to get the coverage they need,” he said. “On the other hand, it could also lead to more denials and disputes, leaving patients caught in the middle. In cases where patients are advocating personally for their health care, they will not be AI-equipped to respond, even in cases where they were wrongly denied.”

Ayers’ humor on the subject was tinged with bitterness. “Hey, at least the AI companies will be raking in the dough, right?,” he said. “Who needs affordable health care when you can have cutting-edge technology fighting over your medical bills?”