UnitedHealthcare accused of defrauding Medicaid program of $100M
UnitedHealthcare has been accused by Massachusetts Attorney General Andrea Joy Campbell of upcoding medical claims. On behalf of the state, Campbell has filed a lawsuit against the insurance giant, alleging it “falsely manipulated the health status” of Medicaid members to boost risk-adjusted payments.
In an announcement, her office said the alleged incidents of diagnosis manipulation occurred in managed care programs the state operates for adults aged 65 and older. This cohort is typically eligible for both federal Medicare and also Medicaid in the state, the latter program referred to as MassHealth Senior Care Options.
Most MassHealth Medicaid plans are managed by private companies at the behest of the state. It’s in this role that UnitedHealthcare allegedly defrauded taxpayers of at least $100 million, the lawsuit contends.
‘Anxiety’ diagnoses siphon cash, AG alleges
As UnitedHealthcare took on MassHealth patients, the company was paid a stipend for members with certain risk factors and pre-existing conditions that can be more expensive to manage, in an effort to offset expected reimbursement challenges.
All MassHealth enrollees undergo a “comprehensive in-home clinical assessment to determine the member’s health status and assign them one of three levels of care,” with Level 3 being the most serious, Campbell’s office confirmed.
It’s here that the alleged manipulation scheme began. The state alleges that UnitedHealthcare would classify members at a Level 2—reserved for those with behavioral health and substance abuse issues—when they should have been designated a Level 1. Many of these patients were said to have diagnoses such as depression or anxiety, which the state argues is insufficient without additional evidence of serious behavioral health needs or substance use disorder.
Similarly, the company is accused of designating patients as having the most serious health condition, ranking them as a Level 3. However, many of those designated for this category were not eligible under the law, Campbell’s office said.
Concerns over the inflated designations were raised after internal reviews at UnitedHealthcare, which the company is said to have conducted in 2018. Despite allegedly discovering the upcoding, the insurer is accused of taking no action to remedy the situation.
“The state’s managed care plans need to act in good faith on behalf of their members and the financial resources of our state’s Medicaid program. Our investigation found that United Healthcare knowingly violated these obligations by manipulating health assessments to increase its profits,” Campbell said. “This lawsuit sends a clear message that no company is above the law, and my office will hold companies accountable for exploiting vulnerable residents and misusing taxpayer dollars.”
In addition to these allegations of diagnosis upcoding, UnitedHealthcare is also said to have billed for services that were not necessary and sometimes never delivered to patients, mainly skilled nursing care.
The insurance business, part of UnitedHealth Group, is the largest provider of MassHealth Senior Care Options, Campbell’s office stated.
Responding to the allegations, UnitedHealthcare has issued statements denying the allegations, calling them “meritless.”
“The Massachusetts Attorney General's complaint is meritless and doesn't accurately describe our Senior Care Options program, which helps seniors with complex care meet their individual health needs," a spokesperson said. "The Attorney General is simply wrong that Massachusetts seniors with complex care needs should not be receiving the support and services UnitedHealthcare is helping to provide."
The case has yet to be litigated in court.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.