The latest in a series of articles, STAT News recently issued a report titled “UnitedHealth pushed employees to follow an algorithm to cut off Medicare patients’ rehab care” by Casey Ross and Bob Herman (Nov. 14, 2023). The report found that ‘[t]he 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 […]”
The algorithm, generated by UnitedHealth subsidiary NaviHealth, is described externally as “merely a guidepost” for patient recoveries, but the report found that “inside the company, managers delivered a much different message: that the algorithm was to be followed precisely so payment could be cut off by the date it predicted.” Ross and Herman state: “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.”
The report describes how NaviHealth “executives have sought to almost entirely subordinate clinical case managers’ judgment to the computer’s calculations” resulting in “inflexible coverage decisions that legal experts say may violate longstanding case law and regulations that govern Medicare benefits.” Quoting Center for Medicare Advocacy Senior Policy Attorney Toby Edelman, the report notes that such use of algorithms appears to run afoul of Medicare law that requires an individualized assessment of patients in a nursing home.
Ross and Herman note that NaviHealth is not only used (and owned) by the largest MA carrier, UnitedHealth, but also by the second largest, Humana, and by “many regional health plans.” Ultimately, as the journalists note, “By restricting the days patients spend in nursing homes, UnitedHealth saves hundreds of millions of dollars every year on their care, increasing profits for one of its most lucrative health insurance products.” The report cites a 2022 paper published by Optum, a division of UnitedHealth, that “reported that NaviHealth achieved savings of more than 20% per episode of care.”
The report notes that the number of expedited appeals filed to challenge termination of skilled nursing facility services by MA plans more than doubled between 2020 and 2022, which “tracks with increasing enrollment in [MA] plans, and the advent of care management firms using algorithms to scrutinize rehab care.”
As discussed in previous CMA Alerts (see, e.g., here (April 2022)), STAT News reporting comports with the Center for Medicare Advocacy’s experiences over the last few years. The Center has been trying to raise awareness of the inappropriate use of restrictive algorithmic software to make coverage decisions (see, e.g., our “Special Report: The Role of AI-Powered Decision-Making Technology in Medicare Coverage Determinations” (January 2022)).
The same day that the latest STAT News article was published, a lawsuit was filed against UnitedHealth for these practices by Clarkson Law. As described in a Bloomberg Law article titled “UnitedHealthcare Accused of AI Use to Wrongfully Deny Claims” by Ian Lopez (Nov. 14, 2023), the “plaintiffs named in the lawsuit are estates for deceased people who were covered by Medicare Advantage plans provided by UnitedHealthcare but denied coverage for at least some of their time in extended care.”
Prior to the STAT News article and the lawsuit, U.S. Representatives Judy Chu and Jerrold Nadler led 30 of their colleagues in sending a letter to CMS urging increased oversight of artificial intelligence (AI) and algorithmic software tools used to guide Medicare Advantage plan coverage decisions (see Press Release and letter here, Nov. 3, 2023).
November 16, 2023 – D. Lipschutz