What happened

UnitedHealth Group's nH Predict system resulted in the wrongful denial of claims for medically necessary extended care for elderly and disabled patients under Medicare Advantage plans 90 percent of the time, according to a lawsuit.

Filed on behalf of the families of two deceased patients - 91-year-old Wisconsin resident Gene B. Lokken and 74-year-old Dale Tetzloff - who had UnitedHealthcare coverage, the suit says the alleged error rate was based on the percentage of patient claims that the company initially denies and then gets "reversed through either an internal appeal process or through federal Administrative Law Judge (ALJ) proceedings." 

The denials had severe consequences, including unfair forced early discharge from care facilities, deteriorating patient health conditions ultimately resulting in their premature deaths, and significant financial burdens, the suit said. Lokken's family had to pay roughly USA 12,000 to USA 14,000 per month out-of-pocket for about a year of therapy until his death.

UnitedHealth Group's use of nH Predict was found by a 2024 US Senate investigation into denial rates for coverage through Medicare Advantage to coincide with a massive increase in claim denials. Denials for post-acute care reportedly increased by 227 percent in 2022 alone. 

Why it happened

UnitedHealth Group stands accused of pressuring managers to adhere to the algorithm's recommendations, even against the advice of clinicians and families, in order to save time and money.

The use of these kinds of algorithms is estimated to automate 50-75 percent of human labour involved in claims processing.

Lawyers for UnitedHealth Group argue that the lawsuit should be dropped because plaintiffs failed to complete Medicare’s appeals process and that their grievances are with the federal government and not the company.