Kraft Heinz and Ralph Lauren are among a group of six large self-insured employers suing UnitedHealth, alleging the insurer routinely approved and paid false, fraudulent and inflated medical claims with their employee health plan money while pocketing undisclosed fees.
The plaintiffs (Kraft Heinz, Whirlpool, Ralph Lauren, W.W. Grainger, Aramark and Sterling Jewelers) hired UnitedHealth beginning in 2020 to administer claims as their TPA.
The complaint, filed Oct 20 in a Texas federal court, accuses United of using automated systems to approve and pay claims with little to no human review, including claims with missing billing codes, duplicate charges, uncovered services and pricing far above market rates. It alleges United applied less scrutiny to the plaintiffs’ claims than it applies to its own fully insured plans.
The employers also allege United engaged in self-dealing by paying higher rates to the more than 2,500 providers it owns, and used a practice called cross-plan offsetting that recovered overpayments in ways that benefited United’s own insured business rather than the self-funded employers whose money was initially overspent.
United’s fee arrangements for out-of-network claims “often resulted in Plaintiffs paying United, and in some cases MultiPlan, far more in ‘savings’ fees or bounty than the doctor, surgeon, or other healthcare provider received for care rendered to Plaintiffs’ employees,” the complaint said.
The plaintiffs said that United withheld or corrupted employee claims data that belonged to them, preventing meaningful audit or oversight. Some, including Kraft, Ralph Lauren and Sterling Jewelers, say they received no usable data at all. The employers are seeking a preliminary injunction to force United to turn over the full claims data, along with reimbursement for alleged losses, disgorgement of profits, punitive damages and a jury trial.
UnitedHealthcare, which works with more than 500 large national employers on health benefits, said it disagreed with the suit.
“It’s disappointing that a small number of our customers chose to pursue a lawsuit instead of meaningfully engaging with us to address their concerns,” the company said in a statement shared with Becker’s. “We strongly disagree with these allegations and intend to vigorously defend against them.”
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