Dive Brief:
- Massachusetts is suing UnitedHealthcare for allegedly defrauding the state’s Medicaid program out of at least $100 million, amid rising concerns that the UnitedHealth-owned insurer may be profiteering in government health programs.
- In a lawsuit filed Friday, Massachusetts Attorney General Andrea Joy Campbell argued the insurer exaggerated the sickness of seniors enrolled in Medicaid managed care plans to receive higher payments from the state.
- A UnitedHealthcare spokesperson dismissed the complaint as meritless. “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,” they said.
Dive Insight:
Massachusetts’ Medicaid program MassHealth offers Senior Care Options health plans to low-income adults over age 65. UnitedHealthcare, which is owned by the healthcare behemoth UnitedHealth, is the largest provider of these plans in the state, according to the lawsuit filed in Suffolk Superior Court.
In the program, seniors receive an in-home clinical assessment to establish their health status, which then determines how much a managed care company like UnitedHealthcare is paid for their care.
Health plans receive a per-member, per-month capitated rate, with a healthier “Level 1” patient reimbursed at the lowest payment rate and a sicker “Level 3” member reimbursed at the highest rate.
Massachusetts argues that UnitedHealthcare has been manipulating its members’ health conditions for years to bump them to a higher tier — and reap higher profits. And now, the state wants UnitedHealthcare to repay the funds it allegedly received.
UnitedHealthcare upcoded its members’ health conditions in three ways, according to the suit. In one example, the insurer classified patients as “Level 2” — a tier reserved for beneficiaries with behavioral health conditions or substance use disorders — even though they lacked any diagnosis or treatment linked to those conditions.
Additionally, Massachusetts claims UnitedHealthcare assessed many members as “Level 3” even though they didn’t qualify for higher level services. The insurer became aware that many of its beneficiaries had been improperly classified as “Level 3” starting in 2018, according to the suit. And, though UnitedHealthcare downgraded many members, the company never told Massachusetts it had been improperly reimbursed or offered to repay the funds, according to the state.
Massachusetts also alleges that UnitedHealthcare submitted health assessments claiming its beneficiaries needed skilled nursing services, even though they likely didn’t need or receive that care.
“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,” Campbell said in a statement. “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.”
UnitedHealth has long faced allegations of upcoding, especially in Medicare Advantage.
In January, a Senate investigation found UnitedHealth was “aggressively” gaming MA, including through sending nurses to conduct in-home health assessments in order to upcode.
The company also confirmed last summer it was under investigation by the Department of Justice, including over its Medicare coding practices.
