The U.S. Department of Labor recently filed a lawsuit against UnitedHealth Group subsidiary, UMR, for alleged wrongful denials of claims regarding emergency room services and urinary drug screenings that date back to 2015. According to the complaint filed by the Labor Department, it was charged that UMR denied these claims “based solely on diagnosis codes and not applying a prudent layperson standard.” Consequently, this actions are reported to have violated the Employee Retirement Income Security Act and Affordable Care Act.
The central role of UMR is to provide benefits services for self-funded employer health plans. In doing so, it is bound by the regulations set forth in the Employee Retirement Income Security Act, which establishes the standard for claims adjudication for firms administering employer health plans. These standards necessitate such firms to “act solely, exclusively and prudently in the interests of plan participants,” as stated in the complaint. However, the Labor Department argues that, in denying emergency room claims for “thousands” of patients without regard for medical necessity, UMR has acted in violation of this law.
Similarly, UMR’s procedures for adjudicating emergency room claims are reported to have failed to comply with the “prudent layperson standard”, a guideline set out in the Affordable Care Act. This standard is considered crucial for health plans administered through UMR by the Affordable Care Act, as it ensures that these insurance plans provide coverage for emergency services that are judged on the basis of symptoms, not diagnosis code.
The lawsuit filed by the Labor Department further alleges that, following a denial of an emergency room claim for a patient, the explanation of benefits provided by UMR is inadequately detailed. Specifically, the Labor Department cites the omission of relevant plan provisions or rules, clarity on the application of the prudent layperson standard, or even the rationale behind the denial, primarily whether it was due to insufficient documentation. The Department also asserts that UMR has consistently failed to guide patients with denied claims through the informal appeal process.
Another major claim leveled against UMR in the lawsuit is its reported denial of all urinary drug screening claims from August 2015 to August 2018 without assessing if the claims were medically necessary. It must be noted that from August 2018, UMR did begin to accept claims for specific urine tests that were run in an emergency room or urgent care center, according to the filed complaint. As of 2019, the company reportedly modified the denial codes for its urinary screening claims from a lack of medical necessity to a request for additional medical records from patients’ providers.
In line with the denied emergency room claims, the explanations of benefits for UMR’s denied urine test claims were reported to lack vital information explaining the reasons behind the claim rejection, according to the Labor Department.
As highlighted by MedCity News, UnitedHealth Group has not extended a response to requests for comment on the matter. Through this lawsuit, the Labor Department aims to ensure that UMR’s emergency and urinary drug screening claims procedures respect federal laws, and that UMR reviews all denied claims from 2015 till the present.
The complaint was filed in the U.S. District Court for the Western District of Wisconsin, corresponding to the geographical area where UMR manages claims for at least 2,136 health plans, as cited in the lawsuit.