UnitedHealth faces lawsuit and federal scrutiny over use of AI to deny patient care

UnitedHealth Group, America’s largest health insurer, is facing an intensifying scrutiny over its use of artificial intelligence (AI) tools to make coverage determinations for Medicare Advantage beneficiaries—a practice that is now at the heart of a major class-action lawsuit and federal investigations. While I know a bit about UnitedHealth, including that it spun our of my medical doctor father’s Minnesota clinic group, Share, its use of AI were initially reported by the New York Times.

The 2023 class-action lawsuit, The Estate of Gene B. Lokken et al. v. UnitedHealth Group, Inc. et al., alleges that UnitedHealth wrongfully delegated coverage decisions to an AI tool called “nH Predict.” According to the complaint, the model overrides treating physicians’ recommendations and has been linked to a surge in premature and erroneous denials of post-acute care for elderly patients. Plaintiffs claim that UnitedHealth knowingly uses an AI system with a 90 percent error rate, banking on the fact that only a tiny fraction of denied claims are appealed..

UnitedHealth asserts its compliance with regulatory standards and emphasizes that coverage determinations align with clinical guidelines. However, the Centers for Medicare & Medicaid Services (CMS) has long cautioned that Medicare Advantage plans, which now cover more than half of eligible beneficiaries, use prior authorization and cost containment tools like AI to manage expenses.

The controversy comes as UnitedHealth, which covers nearly 30 percent of all Medicare Advantage enrollees, faces ongoing federal investigations into its Medicare billing practices and wider questions about its stewardship of public funds. Critics, including patient advocates and policy experts, warn that unchecked AI-driven automation could further erode trust in commercial health plans, which are already seeing declining satisfaction levels and increasing complaint rates.