- Rising Denial Rates and AI Automation: UnitedHealthcare’s prior authorization denial rate for post-acute care doubled from 10.9% in 2020 to 22.7% in 2022, with skilled nursing home claims seeing a ninefold increase in denials. The company used AI to automate the claims process, which critics argue led to more errors and denied claims.
- Cost-Saving Measures and Patient Impact: The report suggests UnitedHealthcare shifted from approving post-acute care in skilled nursing facilities to more home health service authorizations, potentially leaving patients without the care they were entitled to under their Medicare Advantage plans.
- Class-Action Lawsuit and Legal Concerns: A class-action lawsuit filed in November 2023 accuses UnitedHealthcare and its subsidiary NaviHealth of using flawed AI to deny claims for Medicare patients, with a 90% error rate. The lawsuit claims the company continued using the system due to the low appeal rate, prioritizing saving costs over patient care.
In an October report titled “How Medicare Advantage Insurers Denied Patients Access to Post-Acute Care,” Democrats on the U.S. Senate Permanent Subcommittee on Investigations (PSI) accused UnitedHealthcare, the nation’s largest health insurer, of denying a growing number of claims, especially for post-acute care, while using artificial intelligence (AI) to automate the claim process.
The report revealed that the prior authorization denial rate for post-acute care doubled from 10.9% in 2020 to 22.7% in 2022. In particular, skilled nursing homes saw a dramatic increase in denied claims, which were nine times higher in 2022 compared to 2019. The report also claimed that during this period, UnitedHealthcare “implemented multiple initiatives to automate the process.” This automation, the report argues, led to more claim denials, as the system flagged errors that were missed in earlier human reviews.
The report suggested that UnitedHealthcare approved more home health service authorizations instead of post-acute care in skilled nursing facilities, likely as a cost-saving measure. This shift, critics argue, could have left patients without the care they were entitled to under their Medicare Advantage plans.
UnitedHealthcare responded in an October statement, criticizing the report for “mischaracterizing the Medicare Advantage program and our clinical practices, while ignoring CMS criteria demanding greater scrutiny around post-acute care.” The company also emphasized that the Centers for Medicare & Medicaid Services (CMS) requires insurers to apply extra scrutiny to post-acute care requests.
The assassination of UnitedHealthcare’s CEO, Brian Thompson, in New York further added to the controversy. The words “Deny, Defend, Depose” were found etched on shell casings at the scene, fueling discussions about the company’s practices.
According to the Senate report, UnitedHealthcare’s adoption of “Machine Assisted Prior Authorization” in April 2021 aimed to expedite the medical review process. The “HCE Auto Authorization Model” tested in early 2021 showed faster handling times, cutting the review process by 6-10 minutes. However, the automation also flagged more issues, leading to a higher number of denied claims due to errors that had been missed by human reviewers. These errors, ranging from missing documentation to incorrect formatting, contributed to the increase in denials. Despite these concerns, the committee voted to approve the AI model in May 2021.
An investigation by Stat News revealed that UnitedHealthcare pressured employees to use an algorithm designed to predict a patient’s length of stay in rehabilitation. This system aimed to cut off payments for patients who might not need long-term care, potentially denying necessary rehabilitation services. Following this investigation, a class-action lawsuit was filed against UnitedHealthcare in November 2023.
The lawsuit accuses UnitedHealthcare and its subsidiary, NaviHealth, of using flawed AI to deny claims from Medicare patients, especially elderly individuals in nursing homes. The suit claims that the company used AI to override doctors’ decisions about what care was necessary and that the AI model had a 90% error rate. Despite knowing the model was inaccurate, the lawsuit argues, UnitedHealthcare continued using it because they knew only 0.2% of patients would appeal the denied claims. The lawsuit suggests the company counted on most patients either paying out-of-pocket or doing without the remaining care they needed.
These allegations raise serious concerns about the increasing role of AI in healthcare decision-making, especially when it comes to denying medically necessary care for vulnerable populations. UnitedHealthcare’s automation of prior authorization processes and its reliance on AI have come under widespread scrutiny, with critics arguing that the company’s systems may prioritize saving costs over patient welfare.
