By Jonathan Stempel
May 29 (Reuters) - Massachusetts sued a UnitedHealth insurance unit on Friday, accusing it of defrauding the state's Medicaid program, MassHealth, out of more than $100 million by making older patients appear more seriously ill than they actually were.
Andrea Joy Campbell, the state's attorney general, accused UnitedHealthcare Insurance of manipulating the health status of MassHealth members enrolled in its Senior Care Options plan in order to boost profit and advance its "growth-at-all-costs
strategy."
Campbell said the largest U.S. health insurer exaggerated diagnoses for patients 65 and older between 2015 and 2025 through a process known as "upcoding," and failed to reimburse MassHealth for overcharges. The lawsuit seeks to recoup overcharges and obtain triple damages.
UnitedHealthcare operates in Massachusetts as UnitedHealthcare Community Plans of Massachusetts.
In a statement, Eden Prairie, Minnesota-based UnitedHealth called the lawsuit "meritless," and 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."
UnitedHealth has sought to rebuild investor confidence after the December 2024 killing of UnitedHealthcare's chief executive prompted broad public criticism of health insurers' practices.
LAWSUIT ALLEGES FALSE CLAIMS
Campbell's office said several former nurses reported that UnitedHealthcare encouraged upcoding, such as by diagnosing occasional headaches as migraines.
The office also said UnitedHealthcare failed to reimburse MassHealth for overpayments after internal reviews found that many patients had been improperly diagnosed.
In one instance, UnitedHealthcare allegedly overcharged MassHealth by $133,000 over five years for a patient who allegedly needed assistance with bathing, grooming and dressing as she managed Type 2 diabetes, hypertension and arthritis, but who actually "demonstrated complete independence" with help from Tylenol.
“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. "UnitedHealthcare knowingly violated these obligations by manipulating health assessments to increase its profits."
Friday's lawsuit in the Suffolk County Superior Court in Boston accuses UnitedHealth of submitting false claims, breach of contract and unjust enrichment.
(Reporting by Jonathan Stempel in New York: Editing by Chiara Rodriquez)
