Massachusetts officials allege UnitedHealthcare failed to disclose assessment errors identified through internal reviews, allowing the insurer to retain Medicaid overpayments that the state says exceeded $100 million.
The allegations are at the center of a lawsuit filed by Massachusetts Attorney General Andrea Joy Campbell in Suffolk Superior Court against UnitedHealthcare Insurance Co., doing business as UnitedHealthcare Community Plans of Massachusetts. The complaint accuses the insurer of manipulating health assessments for members enrolled in MassHealth's Senior Care Options (SCO) program to obtain higher payments from the state's Medicaid program.
According to the complaint, UnitedHealthcare became aware through a series of internal reviews beginning in 2018 and continuing into 2019 that many SCO members had been improperly classified in the program's highest reimbursement category.
The attorney general's office alleges the insurer did not disclose those findings to MassHealth and did not repay funds tied to the classifications, contributing to overpayments estimated at least $100 million.
The lawsuit describes the alleged conduct as part of a "growth at all costs" strategy that encouraged field nurses to classify members as having more severe health conditions or greater limitations than they had. The allegation originates from the state's complaint and has not been proven in court.
MassHealth's SCO program serves eligible residents age 65 and older in designated areas of Massachusetts. Enrollees undergo comprehensive in-home clinical assessments that determine their health status and place them into one of three care levels, with Level 1 carrying the lowest payment rate and Level 3 the highest.
The attorney general's office alleges UnitedHealthcare increased reimbursements through three methods.
First, the complaint alleges the insurer submitted assessments that placed members into Level 2, a category reserved for individuals with behavioral health or substance use disorders. State officials claim some members were reported as having conditions such as depression or anxiety despite lacking corresponding diagnoses or treatment associated with those disorders.
Second, the state alleges UnitedHealthcare improperly classified numerous members at Level 3, which is intended for individuals with the most serious health conditions and commands the highest payment rates.
Third, the complaint alleges the insurer submitted assessments indicating certain members required daily skilled nursing services even though most did not 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. Our investigation found that United Healthcare knowingly violated these obligations by manipulating health assessments to increase its profits," Campbell said in announcing the lawsuit.
"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," she said.
The attorney general's office said UnitedHealthcare is the largest provider of SCO plans in Massachusetts.
UnitedHealthcare rejected the allegations.
"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," a company spokesperson said. "We remain focused on working with our state partner to help our members live healthier lives."
The insurer has also described the complaint as meritless and said it does not accurately characterize the SCO program, according to statements provided to media outlets including Fierce Healthcare and Life Insurance International.
