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How UHC’s acquisition of a popular Medicare Adv. algorithm sparked internal dissent over denied care

Reporters: Casey Ross and Bob Herman


Frustration was boiling into open conflict within NaviHealth, a company that uses computer predictions to help control the cost of caring for millions of older and disabled Americans on privatized Medicare plans.


The source of the outrage was not a customer or a salesperson, but an algorithm — specifically one that was being used to predict the amount of care needed by seriously ill patients. In 2021, employees raised alarms that efforts to bypass the algorithm — and pay for longer rehab stays — were getting slapped down at higher levels of the organization. Multiple cases involved patients who were still so sick they needed daily infusions to treat infections.

“It’s still happening,” one employee complained in internal communications obtained by STAT. Another added: “I had one that I had to communicate two times that was an IV and very clear on the continued stay — and it was still [denied].”


STAT previously revealed that NaviHealth’s algorithmic denials cut off insurance payments for Medicare Advantage patients struggling to recover from severe diseases and injuries, forcing them to either forgo care or pay thousands of dollars out of pocket. But a new investigation shows the denials weren’t just roiling patients and physicians — even clinical staffers within NaviHealth became increasingly distressed by the way their bosses were letting an algorithm override their discretion.



The tensions emerged after NaviHealth was acquired by Optum, a division of UnitedHealth Group, which also owns the nation’s largest Medicare Advantage insurer, according to three former NaviHealth employees. Attempts to extend care past a predicted discharge date, or authorize treatment in a more expensive facility, resulted in pushback from managers. If employees did it repeatedly, managers questioned whether they needed to be retrained.


“It was very much about following the algorithms and basically not using your clinical judgment,” one former NaviHealth medical reviewer said. “That was very different from before we were owned by Optum.”


The company’s adherence to the algorithm, even when clinicians disagreed, is a powerful example of the potential dark side of artificial intelligence and its incursion into health care. As large corporations gain control of increasingly powerful and largely unregulated AI tools, patients may find themselves at the mercy of machines that operate behind the scenes of their care, making money for big businesses even if following their advice hurts everyday people.


STAT’s reporting is based on a review of internal communications at NaviHealth, interviews with five former employees, patients’ family members, lawyers, and experts in insurance coverage and mathematical modeling. The former employees were granted anonymity because they feared professional and legal retaliation.


NaviHealth managers have said the algorithm is not used to make coverage determinations. In a statement, the company repeated what it told STAT in March: “The tool is used as a guide to help us inform providers, families, and other caregivers about what sort of assistance and care the patient may need both in the facility and after returning home. Coverage decisions are based on [Centers for Medicare and Medicaid Services] coverage criteria and the terms of the member’s plan.”


But a deeper look inside NaviHealth reveals the algorithm is, in fact, a focal point for determining coverage. It puts the process in motion, sets the deadline for coverage decisions, and provides information that can influence the outcome. In some cases, the algorithm was used in coverage decisions that may violate Medicare’s rules, which are designed to protect the safety and dignity of beneficiaries. The investigation revealed that even in instances when staffers argued that patients needed more time in rehab, NaviHealth’s physician medical reviewers deferred to the algorithm, fueling internal dissent that the denials were inappropriate and contrary to clear medical evidence.


NaviHealth also directed frontline care coordinators to time their reviews of patients’ progress so they could be discharged on the exact date projected by the algorithm, creating a kind of assembly line that staffers had to stop to get patients more care. The staffers said they didn’t always know what happened to patients next, or how they fared. But they worried that the process was designed to save money — not lives.


“It messes with you when you’re discharging people because they’re just a number to them,” a former NaviHealth patient chart reviewer said. “You’re like, ‘I’m doing that. Like, I’m part of this gear that’s turning, that’s grinding out savings.’”


NaviHealth said in its statement that it offers to speak with patients’ caregivers before payment denials are issued, and a senior clinical manager added that patients can appeal if they disagree with the company’s decision.


But the concerns voiced by NaviHealth’s former employees echo the experiences of family members on the receiving end of the denials — people forced to watch their loved ones suffer after being cut off from care prematurely.


“I felt like we were targeted,” said Gloria Bent, 78, the widow of Gary Bent, a retired physics professor at the University of Connecticut who needed rehab care after undergoing brain surgery to remove a cancerous lesion. She said she successfully appealed two of NaviHealth’s attempts to cut off payment for her husband’s stay in a skilled nursing facility in July 2022. But the company’s third denial stuck, and her husband was sent home with a fever and throbbing pain in his head and neck.


She gave him Tylenol, and tried to keep him comfortable.


But “the next morning, we could not rouse him,” Bent said. “When we were able to rouse him, he did not know who he was, where he was, or who I was.” She called for emergency help, and her husband was taken to a hospital, where he spent three weeks recovering from bacterial meningitis. He died in March 2023 at age 82.


NaviHealth declined to comment on Gary Bent’s care, citing the need for his wife to sign a privacy waiver. Earlier this year, she told her story under oath before a Senate subcommittee that launched an investigation of denials by major Medicare Advantage insurers.


Former staffers said UnitedHealth’s $2.5 billion acquisition of the company in May 2020 significantly increased the number of clinical employees. As a result, Optum sought to standardize their training and responses to questions that arose about coverage for patients’ care. Those standards, clinical staffers said, often favored authorizing the lowest-cost type of care and adhering to the algorithmically projected discharge date once a patient started getting rehab care.


If employees deviated from that formula, they came under scrutiny from supervisors who wanted to know why — and reminded them how they were expected to handle certain types of cases.



Medicare Advantage has become highly profitable for insurers as more patients over 65 and people with disabilities flock to plans that offer lower premiums and prescription drug coverage, but give insurers more latitude to deny and restrict services.


The company’s algorithm is used at multiple stages of care, starting when patients are still in the hospital. There, it’s used to measure their levels of physical and cognitive function, and to gauge the amount and type of care they may need after the hospital. Then it is run again when they arrive at a skilled nursing facility to update their clinical status, estimate the number of therapy hours they will need, and calculate an anticipated length of stay and suggest what kind of assistance they may need after leaving the facility.


Several former employees said the algorithm was helpful in understanding patients’ clinical status and likely care needs. It analyzed a wide array of data about them: primary diagnosis, additional medical problems, functional status, age, and living situation, and then compared them to similar patients in a database of 6 million people who previously received care.


The problem wasn’t the algorithm, they said. It was how it was being applied.


Under Optum, NaviHealth’s predictions about when a given patient would be ready to leave a facility weren’t used as a guidepost. They were a target discharge date the company tried to hit.


“They definitely wanted you to be conscious of the predicted discharge date,” another former NaviHealth care coordinator said. The ex-employee supported the use of the algorithm because it had the intent of more quickly getting patients home, which is where they generally want to be and carries lower risks of infections and other complications.


However, the former worker acknowledged NaviHealth and its insurance company clients — which include NaviHealth’s sister company, UnitedHealthcare, and Humana — have a clear financial incentive to get patients out of rehab as fast as possible. That’s especially the case with Medicare Advantage, a product that has the highest underwriting profit margins of any type of health insurance. “All sides of the company want to make money,” the former care coordinator said.


NaviHealth put protocols in place to keep the process on schedule. The company’s frontline care coordinators, who are responsible for communicating with providers and families — and tracking patients’ progress — were told to begin compiling clinical notes well in advance of the predicted discharge date. They were directed to file reports about a patient’s progress and coverage status to physician medical reviewers at least three days ahead of that date, to ensure that timely decisions could be made. The ultimate call on whether a patient’s coverage should be terminated was left up to one of the company’s physician reviewers. But the process itself was built around the algorithm, and the timeline it set forth.


“They have so many stops to keep a nurse or a therapist from going rogue and just pushing past that [discharge] date,” the former patient chart reviewer said.


NaviHealth’s care coordinators could still recommend that patients remain in rehab. But that didn’t always mean higher-level physician medical reviewers would take their advice. In 2021, NaviHealth staffers operating in at least two states noticed an unusual pattern of denials: Seriously ill patients they said should stay in rehab were getting cut off from payment.


Multiple employees raised alarms, noting in an internal chain of communications reviewed by STAT that they had clearly marked the patients were not ready to be discharged. In two instances flagged in the communications, patients still required additional days of IV antibiotics when the algorithm said they could be sent home. The federal Centers for Medicare and Medicaid Services defines IV treatment as a skilled service, which means it would be covered under traditional Medicare.


“These IVs are pretty clear cut-and-dried with CMS,” one employee opined in the communications, complaining their recommendation for a patient to keep getting care was overturned.


Providers have reported similar denials involving patients on IV medicine. In testimony filed as part of the Senate investigation, LeadingAge, a group that represents nursing homes and other providers, flagged a case in which NaviHealth’s algorithm predicted a patient would be discharged after 13.2 days, even though the individual was prescribed to be on IV medicine for another 16 days past the 13-day mark.


“Under traditional Medicare … the patient would have received coverage for all the days that they required IV medication,” the organization wrote. “But the plan did not cover it.”


Casey Schwarz, a top attorney at the Medicare Rights Center, a nonprofit that helps Medicare beneficiaries with their coverage, cautioned that it’s difficult to say whether these denials violated Medicare law without knowing all the details of the cases. But patients would be entitled to that care if they met all of Medicare’s criteria for skilled nursing care.


“In situations like the one you’re describing, we have helped people file appeals of that decision, and they’ve been successful,” Schwarz said.


In one case reviewed by STAT, a former NaviHealth staffer said the family wasn’t comfortable administering an IV at home. When family members indicate they cannot safely administer IV medicines once a patient leaves a nursing home, it is harder to justify a patient’s discharge, experts in medical necessity criteria said.


“That’s a reason to not discharge them,” said Prashant Vaishnava, a physician and former medical director at EviCore, another firm that helps insurers manage the cost of care. “If there’s not a way to continue the IV antibiotics at home, or there are significant barriers for them to do so, that seems like a deviation from what our coverage criteria are or should be. We’re doing a disservice to the patient at that point.”


As the denials piled up, employees pressed for explanations. In addressing complaints that one physician reviewer repeatedly overturned recommendations for continued care, a NaviHealth supervisor told employees the reviewer “isn’t necessarily reading and looking at everything we’re doing.” The supervisor told the employees to keep doing their best to document patient cases, adding that poor decisions were inevitable in any process for handling such a large volume of complicated cases.


But the likelihood of errors increases significantly if physician reviewers are not reading the recommendations of frontline care coordinators and the clinical notes their opinions are based on, Vaishnava said. Those notes might contain details about how much pain a patient is reporting, or whether they’ve made good progress in physical therapy sessions.


“The medical reviewer is responsible for all of the information that’s in front of them, whether it’s 300 pages or whether it’s two pages,” he said. “There is a human being reflected in those pieces of paper.”


A NaviHealth senior clinical manager said the company was not aware of the complaints about denials issued to patients on IV antibiotics, or the complaints that a physician medical reviewer was not reading care coordinators’ reports. The manager said physician medical reviewers are trained to read all of the documents relating to a patient’s case and make decisions based on Medicare’s coverage rules.


But by inserting the algorithm into that process — along with its target discharge date — NaviHealth is empowering a tool with only a limited vantage point of the patient and their care needs. Its projected discharge date is based on care received by similar patients in its database. However, NaviHealth has not disclosed exactly where the data came from, what kinds of patients are included, or how they are stratified by age, race, gender, and income level. The company also couldn’t point to any peer-reviewed studies conducted to assess the algorithm’s accuracy in predicting discharge dates as measured against the outcomes of patients.


NaviHealth’s senior clinical manager said the company’s database has been built over many years with reports that providers generate about the type and length of care patients received, and their outcomes.


Experts in mathematical modeling said the lack of clarity on the underlying reference data makes it impossible to gauge the validity of the algorithm’s predictions. Furthermore, because its projected length of stay is based on an average, patients who are sicker than average could get cut off from care prematurely.


“The people who are the neediest are going to suffer,” said Ruth Etzioni, a biostatistician at Fred Hutchinson Cancer Center in Seattle, who added that patients’ conditions often change significantly, and suddenly, during the course of their care. “We cannot know at the admission what will happen later.”


Gloria Bent said NaviHealth called to notify her of her husband’s discharge date, July 4, 2022, before he had even been evaluated by the clinical staff at his skilled nursing facility in Connecticut. The date was only halfway into the eight weeks of rehabilitation Gary Bent’s doctors said he would need after his brain surgery.


The call was jarring, Bent said. Not only was she being told her husband might not get the care he needed, the message was coming from NaviHealth, a company she knew nothing about. The couple’s Medicare Advantage policy was with UnitedHealthcare — not NaviHealth — and she had read that under Medicare rules, her husband was entitled to get 100 days of skilled nursing care.


The person on the phone did not explain the involvement of an algorithm or discuss how the discharge date was calculated. Instead, Bent said, the NaviHealth staffer told her that she should make arrangements to put her husband in long-term care by July 4. If she preferred to care for him herself, she needed to consider moving out of her home within three weeks, because it was not wheelchair accessible.


“I was stunned,” Bent said. She relayed the information to the staff of the nursing facility, who explained it probably wasn’t the last time Bent would hear from NaviHealth. “And they were absolutely right,” Bent recalled. During her husband’s stay, she received two more calls from NaviHealth employees who floated different discharge dates.


NaviHealth did not respond directly to Bent’s assertions about her husband’s care. But the company said its policy is to run the algorithm after a patient has been evaluated by a facility’s staff, and then work with the family to make arrangements to safely discharge the patient.



The company backed off from the initial July 4 date, but started issuing payment denials on July 23, about six weeks after her husband began his recovery. Bent said he was becoming more mobile and engaged in physical therapy sessions, but wasn’t ready to go home. She said she beat back two of NaviHealth’s payment denials by appealing to a Medicare contractor that adjudicates coverage disputes.


A third denial came just a few days after she won the second appeal — and this time, she lost. Bent said the chain of events that unfolded next is still a traumatic blur. Her husband arrived home five hours later than expected, complaining of pain in his head and neck. He was running a fever and couldn’t move himself from gurney to wheelchair.


“It was a long, hard night,” Bent said. When her husband woke up disoriented the next morning, unable to recognize his wife and daughter, a call to local EMTs for transport back to the hospital was the only option.


After he was hospitalized again, Gary Bent eventually returned home, and died several months later. But Gloria Bent still laments that his dying days were not lived better, free from the dictates of an algorithm, financial fears, and seemingly arbitrary deadlines for his recovery.


“The layer of trauma that comes from dealing with these companies just piles on,” she said. “We’re still trying to get out from under the emotional fatigue of his last 10 months — and it didn’t have to be that way.”



This story is part of a series examining the use of artificial intelligence in health care and practices for exchanging and analyzing patient data. It is supported with funding from the Gordon and Betty Moore Foundation.

STAT is investigating denials and appeals in Medicare Advantage, and the role that technology plays in those decisions. If you have an experience with Medicare Advantage denials, please share your story with us. We will not share your name or story without your permission.

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