The Allegations
Plaintiffs claim in their class-action lawsuit that UnitedHealthcare (UHC) used an artificial intelligence program, nH Predict AI Model (“nH Predict”), in lieu of physicians to make coverage determinations. nH Predict compares the specific patient with similar patients and recommends an estimated amount of post-acute care needed. Plaintiffs contend that UHC used this model to determine the amount of coverage an individual patient needed, regardless of the recommendation made by their treating physician. Plaintiffs describe the nH Predict as applying “rigid criteria” that UHC required its employees to follow under the threat of termination. Additionally, Plaintiffs allege that UHC knew of nH Predict’s inaccuracies because over 90% of claim denials are reversed on appeal and over 80% of preauthorization denials are reversed. UHC denies any use of nH Predict.
Plaintiffs also allege that UHC has frustrated the appeals process. Plaintiffs claim that when a patient has a denial overturned, UHC immediately issues another denial letter such that the patient is perpetually stuck in a loop of denial, appeal, denial until eventually they give up. Additionally, Plaintiffs accuse UHC of approving any appeals that reach the late stages so that administrative remedies are never exhausted.
The United States District Court for the District of Minnesota stated in its February 13, 2025 Memorandum Opinion and Order: “Plaintiffs bring a putative class action contesting UHC’s use of nH Predict, rather than actual people, to make coverage decisions, contradicting UHC’s insurance policy documents. Because all the Plaintiffs’ claims originate after a denial of benefits, the Medicare Act requires Plaintiffs to exhaust all administrative remedies before the Court can exercise subject matter jurisdiction. No plaintiff has met this requirement. But because the Court finds that Plaintiffs suffered irreparable injury and that exhaustion would be futile, the Court will waive this requirement. Waiving the exhaustion requirement does not save all of Plaintiffs’ claims, however; those claims must also withstand the broad preemption clause. Because the unjust enrichment, bad faith insurance, and state statutory claims regulate the same subject matter as the Medicare Act, those claims are preempted. The only claims that survive, then, are the claims for
breach of contract and for breach of the implied covenant of good faith and fair dealing because the Court will only need to evaluate compliance with the insurance agreements. Accordingly, the Court will grant in part and deny in part UHC’s motion to dismiss, allowing Plaintiffs’ breach of contract and breach of the implied covenant of good faith and fair dealing claims to proceed.”
Estate of Gene B. Lokken v. United Health Group, Inc., Civil No. 23-3514 (JRT/DJF).
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