UnitedHealthcare is under fire with the state of Massachusetts, with a new lawsuit claiming the insurer padded its pockets by making senior members look sicker on paper than they were in real life. The suit against UnitedHealthcare (DBA UnitedHealthcare Community Plans of Massachusetts) alleges that the health care conglomerate intentionally exaggerated patients’ conditions to increase profits.
The complaint targets a managed care program for adults 65+ called Senior Care Options (SCO). A managed care plan is a type of health insurance where the state pays a private insurer a fixed monthly amount per member. The insurer is responsible for coordinating and delivering all covered services.
“Our investigation found that United Healthcare knowingly violated these obligations by manipulating health assessments to increase its profits," said Attorney General Andrea Joy Campbell, who is leading the lawsuit in Suffolk Superior Court.
Medicaid and the Senior Care Options Program
Medicaid is the joint federal‑state program that provides health coverage to low‑income individuals, including many older adults. Managed care plans like UHC’s SCO program receive fixed monthly payments based on each member’s assessed level of need. The reality is that SCO plans make more money when members have higher medical or behavioral health needs.
Older adults eligible for the MassHealth SCO plan receive comprehensive medical coverage, including mental health, dental, prescriptions, and other support services.
The Anatomy of the Lawsuit
According to the complaint, UHC distorted assessment levels. It did this in a few ways, including classifying some patients as Level 2 based on mental health diagnoses such as anxiety, even if they did not have a corresponding diagnosis or treatment plan for addiction or behavioral health. The complaint also accuses UHC of categorizing members as Level 3 who did not meet the criteria for the highest level of care.
A clinical assessment determines the appropriate level of care:
- Level 1: Seniors with the lowest care needs. They require minimal support, so this category receives the lowest payment rate.
- Level 2: Seniors with moderate care needs. They need more services than Level 1, and payment rates reflect this mid‑level support.
- Level 3: Seniors with the most significant health needs. They require the highest level of care, making this the highest payment category.
The State of Massachusetts alleges:
- False claims
- Breach of contract
- Unjust enrichment (when a party gains money or another benefit at your expense)
The lawsuit seeks to recover $100 million in overpayments and other damages. But it’s possible UnitedHealth Group could be out $300 million thanks to the Massachusetts False Claims Act, which automatically triples damages (treble damages).
UHC denies these claims, calling the complaint “meritless.”
Fraud in Government Healthcare Programs
Government‑funded healthcare programs are frequent targets for fraud. One of the most common forms is billing for medical services or items that aren’t necessary — or in some cases, never even provided. Another example is “upcoding,” or billing for a more complex, expensive service than the one actually performed.
One element of the UHC lawsuit is how the health insurance company allegedly billed for daily skilled nursing services that members never received. This is on top of UHC allegedly misclassifying members into higher‑paying categories based on unsupported mental health or substance use disorder diagnoses.
Paying the Price of Medicaid Fraud: Patients and Taxpayers
Both patients and taxpayers are victims here. Taxpayer dollars fund MassHealth, and inflated claims drain public resources. Patient misclassification also harms the patient. Altering a patient’s medical profile for a profit creates false and incomplete health histories. This can impact future care decisions and undermine vulnerable adults’ trust in the healthcare systems and their providers.
