Reports and lawsuits allege UnitedHealth uses AI algorithms to cut off care for the elderly and disabled

I’m writing this in my hotel room in Milwaukee where I will be speaking to a gathering of local business and community leaders later today about what they need to understand about Big Insurance. 

I scrapped my prepared remarks when I saw the shocking but completely credible investigative reporting by STAT’s Casey Ross and Bob Herman yesterday about UnitedHealth’s private Medicare business (marketed as Medicare Advantage) and the company’s use of AI to deny or severely restrict access to often life-saving care. And today Ross and Herman are reporting that a class action lawsuit has been filed against UnitedHealth. The lawsuit, filed in a federal court in Minnesota on behalf of the families of two UnitedHealth private Medicare plan enrollees who died, accuses the company, which is based in Minnesota, of using an algorithm to “systematically deny” coverage of elderly patients’ rehabilitation care. 

I plan to use their reporting during my speech to drive home my overarching point: The big for-profit health insurers will do whatever it takes to make Wall Street happy, and in their relentless pursuit of profits they are putting Americans' lives and bank accounts at risk. And that includes themselves and their employees.

The headline of the STAT story is “UnitedHealth pushed employees to follow an algorithm to cut off Medicare patients’ rehab care.” Meticulously reported, the article rang true from both my professional and my personal experience, as a former insurance executive and as the son of a former AARP/UnitedHealthcare enrollee. Had I not been able to switch my mother out of her MA plan and into traditional Medicare after she broke her hip, I believe she would have died years earlier. 

The STAT story — along with another blockbuster story that appeared in The New York Times last year under the headline, “‘The cash monster was insatiable’: How Insurers exploited Medicare for billions,” should be required reading for every member of Congress and anyone who cares about how big insurers are sucking trillions of dollars out of taxpayers’ pockets while sending many of our senior citizens to early graves.

I wish I could republish both articles because they provide important glimpses into the corrupt and hugely profitable private Medicare business.

Here’s the first paragraph of the STAT story:

The nation’s largest health insurance company pressured its medical staff to cut off payments for seriously ill patients in lockstep with a computer algorithm’s calculations, denying rehabilitation care for older and disabled Americans as profits soared, a STAT investigation has found. 

A bit further down in the story is this paragraph:

Internal documents show that a UnitedHealth subsidiary called NaviHealth set a target for 2023 to keep rehab stays of patients in private Medicare plans within 1% of the days projected by the algorithm. Former employees said missing the target for patients under their watch meant exposing themselves to discipline, including possible termination, regardless of whether the additional days were justified under Medicare coverage rules.

And then there is this:

The stringent performance goal was part of a broader effort to reduce expensive nursing home care for frail patients with privatized Medicare plans, the internal documents show. The strategy was conceived and executed by former top Medicare officials whose policies became a blueprint for UnitedHealth to reap hundreds of millions of dollars annually by shredding the government’s safety net with payment denials backed by an algorithm. (Emphasis added.)

The constant pressure to deny claims

The story quotes by name one former UnitedHealth employee who says she was fired for approving coverage for care she felt was justified but that made her an outlier within her department. 

You can be certain STAT’s lawyers reviewed every word of this story and made sure the reporters’ findings would hold up to scrutiny.

When I was a VP and department head at Cigna, I had to rank the employees under me based on how well they met their annual job objectives. If an employee fell below a line that HR and the C-Suite drew, I’d have to fire them. There was no wiggle room. It’s called “forced ranking,” and it’s gut-wrenching to have to carry out.

Every employee of a big for-profit health insurance company knows they have to do their part to help the company achieve “profitable growth” and “enhance shareholder value.” You do not need to get a memo that explicitly states that. It is part of the corporate culture and way of doing things. You learn quickly that you are in competition with your coworkers, and you’ll do whatever you can to keep from falling below that line. 

Reading Ross and Herman’s story brought back the nightmare my mother found herself in when she needed rehab and skilled nursing care. We learned there was a very short list of facilities in UnitedHealth’s network in her area of Tennessee. After she was discharged from the hospital, she was transferred to one of those in-network facilities, and it quickly became clear to me that Mom probably wouldn’t live long if she stayed there.

For one thing, the staff didn’t seem to be making much of an effort to get her to walk again. As a consequence, she was in bed much of the day and night and developed pressure sores that can get infected and are challenging to treat. They can be and often are lethal.

At one point, a nurse at the facility told me we should begin getting Mom’s affairs in order because the infections likely would kill her within weeks if not days. 

I did some quick research to see which facilities in the region had the best quality scores and arranged for Mom to be transferred to another skilled nursing facility about 30 miles away. The problem was that the new facility was not in UnitedHealth’s network. So I had to help Mom switch back to traditional Medicare, which doesn’t have proprietary and inadequate provider networks. Almost all doctors and facilities participate in traditional Medicare. 

The care team at the new facility went to work right away to address the pressure sores and to get her back on her feet. Mom would go on to live almost another 10 years. Here’s a link to a story I wrote in 2015 about Mom’s experience with private Medicare. 

The STAT story goes into great detail about how UnitedHealth uses algorithms to determine how long a patient can get coverage for a stay in a rehab facility. The patient stories are heartbreaking. They also show that appealing a denial is usually fruitless.

It is important to note that NaviHealth, which is owned by UnitedHealth, is also used by Humana, the company with the second-highest number of private Medicare enrollees behind UnitedHealth. 

The AARP connection

It’s also important to note that UnitedHealth markets its private Medicare plans in a long-standing partnership with AARP. Turn your TV on for a few minutes today and you likely will see an AARP/UnitedHealth ad. That’s because we are in the midst of “open enrollment,” when seniors have a window of a few weeks to pick among traditional Medicare and a bewildering array of private Medicare plans. The ads never mention any of the many potentially deadly side effects of enrolling in an MA plan.

I reached out to AARP for a reaction to the STAT article. Here are the questions I asked:

• Were you/are you aware of what the reporters found?

• Will you be doing your own investigation to verify or challenge the reporting?

• What are you telling members of Congress who inquire about it and AARP’s relationship with UnitedHealth?

• What are you telling people enrolled in AARP/UnitedHealth MA plans?

• What are you telling the Centers for Medicare and Medicaid Services (which is supposed to be administering and policing the MA program in a way that protects patients and taxpayers)? 

• Will you suspend your partnership with UnitedHealth while you do your own investigation?

• Will you suspend/cancel your advertising with UnitedHealth during the remainder of this open enrollment period (which ends on Dec. 7). If not, why not? 

• Will you allow UnitedHealth to continue using the AARP brand?

AARP replied with this response yesterday afternoon:

We are monitoring this issue development. We expect all providers we work with to fully meet legal, ethical, and quality standards. We cannot comment on a potential investigation like the one involving United HealthCare that you mention in which we are not directly involved.

AARP is not named in the lawsuit and it’s not clear if the deceased had enrolled in a private UnitedHealth MA plan co-branded with AARP. As the Washington Post reported today, the lawsuit “goes on to further allege that the health giant knew that the algorithm had an extremely high error rate and that it denied patients’ claims knowing just a fraction would file appeals to challenge the insurer’s decisions.”

The lawsuit notes that the family of one of the plaintiffs, Gene B. Lokken, did appeal UnitedHealth’s denials without success and had no choice but to pay $12,000 to $14,000 per month out of pocket in order to continue providing care for him at a skilled nursing facility. 

Folks, you might want to share this with anyone you know who might be considering enrolling or reenrolling in a UnitedHealth Medicare Advantage plan.