Labor Department Sues UnitedHealth Group Over ‘Thousands’ Of Claims Denials

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The U.S. Department of Labor recently sued UnitedHealth Group subsidiary UMR, alleging that it wrongfully denied claims for emergency room services and urinary drug screenings since 2015.

The Labor Department’s complaint, which was filed Monday, charged that UMR denied claims “based solely on diagnosis codes and not applying a prudent layperson standard.” By doing so, UMR violated the Employee Retirement Income Security Act and Affordable Care Act, according to the lawsuit.

UMR is a third-party administrator that provides benefits services for self-funded employer health plans. The Employee Retirement Income Security Act created claims adjudication standards for companies that administer employer health plans, requiring them to “act solely, exclusively and prudently in the interests of plan participants,” the complaint said. UMR disobeyed this law by denying emergency room claims for “thousands” of patients without accessing their medical necessity, according to the Labor Department. 

The lawsuit also said that UMR’s procedures for adjudicating emergency room claims did not comply with the “prudent layperson standard” established in the Affordable Care Act. Health plans administered through UMR are required by the Affordable Care Act to define this standard, as it ensures that insurance plans provide coverage for emergency services based on symptoms.

The Labor Department alleged that UMR, following the denial of an emergency room claim for a patient, sent an explanation of benefits that lacks sufficient details. The denied claims did not specify the relevant plan provisions or rules, the application of the prudent layperson standard or whether the denial was due to inadequate documentation, according to the complaint. The Labor Department also said that UMR failed to inform patients with denied claims about the informal appeal process.

Additionally, the lawsuit alleged that UMR denied all urinary drug screening claims from August 2015 to August 2018 without determining whether the claims were medically necessary.

In August 2018, UMR began accepting claims for some urine tests if they were done in an emergency room or urgent care center, according to the complaint. Then in 2019, the company changed its urine screening claims denial codes from lack of medical necessity to a request for more medical records from the patient’s provider, the lawsuit said.

Similar to the denied emergency room claims, the explanation of benefits for UMR’s denied urine test claims also lacked information about why the claims were rejected, the Labor Department charged.

UnitedHealth Group did not respond to MedCity News’ request for comment.

With its lawsuit, the Labor Department is seeking to ensure UMR’s emergency and urinary drug screening claims procedures comply with federal law, as well as require UMR to reprocess all denied claims from 2015 to present.

The department filed its complaint in the U.S. District Court for the Western District of Wisconsin. UMR manages claims for at least 2,136 health plans in this area, according to the lawsuit.

Photo: Bet_Noire, Getty Images

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