UnitedHealth Group reached a $20.25 million settlement with the U.S. Department of Labor on Feb. 7, resolving allegations that its subsidiary, UMR, improperly denied claims for emergency room visits and urinary drug screenings for thousands of patients.
The Labor Department originally filed its lawsuit against UnitedHealth subsidiary UMR in July 2023 in a Wisconsin federal court. UMR is UnitedHealthcare's third-party administrator that provides health benefits services to more than 2,100 self-funded employer plans, according to the complaint.
By denying emergency claims "based solely on diagnosis codes and not applying a prudent layperson standard," the government said UMR violated ERISA, which oversees self-funded plans. The department said that UMR's explanation to members for the denied emergency claims violated the ACA and the government's internal claims procedures regulations.
For urinary test denials, the Labor Department alleged that UMR denied all claims from August 2015 to August 2018 without determining whether a claim was medically necessary.
According to the complaint, UMR changed its claims review process in 2018 to cover some urine screenings that were provided in an emergency setting. In 2019, the subsidiary allegedly switched its urine screening claims denial codes from lack of medical necessity to a request for more medical records from the provider.
The lawsuit had sought to require UMR to reform its emergency and urinary drug testing claims procedures to comply with ERISA and readjudicate all denied or partially denied claims from Jan. 1, 2015, to present.
The settlement amount will go toward compensating affected beneficiaries. UnitedHealth will also be required to reprocess denied claims and provide further relief to those impacted by the improper denials.