- A federal appeals court said UnitedHealth Group cannot offset overpayments to out-of-network providers made by some of its health plans by reducing another of its plans' payments to the same provider.
- In a unanimous decision handed down Tuesday, the United States Court of Appeals for the Eighth Circuit affirmed a Minnesota district court ruling in favor of the providers, calling the insurer's "cross-plan offsetting" policy an overreach of its administrative authority over its employer-sponsored health plans.
- The plaintiffs' attorneys have brought similar cases against UnitedHealth and Aetna in New Jersey, Modern Healthcare reports.
The case highlights the growing issue of how some payers deal with out-of-network providers, and underscores how fractious negotiations between payers and providers can be.
UnitedHealth's aggregate payment and recovery policy was implemented in 2007 and challenged in class action lawsuits filed in 2014 and 2015. The district court consolidated the two cases to allow for summary judgment of whether the governing documents of the plans the company administered authorized cross-plan offsetting.
The lower court concluded that nothing in the plan documents came close to authorizing such a policy, and the appeals court concurred.
In rejecting the appeal, Circuit Judge L. Steven Grasz called UnitedHealth's argument "akin to adopting a rule that anything not forbidden by the plan is permissible." Allowing such an approach would undermine members' ability to rely on plan documents to know what authority the payer has, he added.
Grasz also asserted that UnitedHealth's cross-plan offsetting procedure "approaches the line of what is permissible" under the Employer Retirement Income Security Act, which sets minimal standards for employer-based plans.
In a statement, UnitedHealth said it is "committed to improving affordability and overpayment recovery is an important tool in these efforts. We will continue to enhance this process for our customers, who support our efforts to recover these funds on their behalf."
UnitedHealth posted 2018 financial results earlier this week, showing revenue up 12% from the prior year — to $226 billion. The strong uptick included Optum, which topped $100 billion in revenue for the first time, besting company expectations.