U.S. Labor Department sues UnitedHealth Group subsidiary over denied claims

The U.S. Department of Labor has filed a lawsuit against UMR alleging that the subsidiary of UnitedHealth Group improperly denied thousands of emergency department and drug screening claims without assessing their merit. UMR is a third-party administrator that contracts with almost 2,140 self-funded plans to adjudicate their claims.

In the complaint filed last week, Labor Secretary Julie Su asked the court to order UMR to bring its procedures for handling claims in line with the law and re-adjudicate claims denied since 2015. The complaint alleges that UMR determined whether to pay emergency services claims by comparing the diagnostic code provided to two code lists, True ER and the Sudden and Severe list. If a patient had a diagnosis not included on one of those lists, UMR allegedly denied the claim without any further review.

UMR’s claims adjudications didn’t comply with the “prudent layperson” standard established under the Affordable Care Act, which defines conditions based on symptoms and extends beyond the two diagnostic lists, the Labor Department said. In addition, it alleges that UMR provided patients with limited information about appeals processes or why the claim was denied.

The government also takes issue with how UMR evaluated drug screening claims. The administrator “simply denied” all urinary drug screening claims submitted between 2015 and 2018 instead of evaluating whether they were medically necessary, the complaint alleges.

UMR made changes to the policy in 2018 after it determined that 98% of those claims from an emergency room setting were overturned on appeal, according to the suit. Beginning that year, UMR allegedly revised its policy from blanket denials of all urinary drug screening claims to denying all claims that didn’t originate from an ER or urgent care center.

As with emergency services denials, the Labor Department said that beneficiaries whose urinary drug screening claims were denied received little useful information about why their claims were turned down or how to appeal the decision.

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The complaint deals with “administrative processes that are no longer in place,” UnitedHealthcare spokesperson Maria Shydlo said in a statement. “We have been in ongoing conversations with the DOL regarding this matter and will continue to defend our position vigorously.”

According to UnitedHealth, UMR is the nation’s largest third-party administrator.