The United States Department of Labor has sued UMR, Inc., which serves as a third party administrator for UnitedHealth ERISA-covered plans, for improperly denying claims for emergency department services and for urinary drug screening. UMR’s parent company is UnitedHealth Group, Inc. The complaint was filed in the United States District Court for the Western District of Wisconsin, where UMR is headquartered.
The complaint alleges that UMR’s adjudication process does not comply with the “prudent layperson” standard established under the Affordable Care Act (“ACA”), which is incorporated into ERISA, by denying claims for emergency department services based solely on diagnosis codes. The complaint alleges that under its “True Emergency” policy, UMR violates ERISA and plan documents by failing to apply the prudent layperson standard and instead denies all claims for emergency department services that lack diagnosis codes determined by UMR to be “True Emergency” codes.
Similarly, the complaint alleges that UMR violates ERISA and plan documents by failing to apply any medical necessity standard in denying claims for urinary drug screening. According to the complaint, for a period of time, UMR denied all claims for urinary drug screening. Starting in August 2018, UMR has denied all claims for urinary drug screening services not provided in an emergency department or urgent care center.
The complaint also alleges that UMR’s Explanation of Benefits forms denying claims for emergency department and urinary drug screening services contain insufficient information to comply with the ACA and DOL regulations.
The complaint’s prayer for relief seeks on order requiring UMR to revise its procedures for adjudicating emergency department and urinary drug screening services and to readjudicate denied or partially denied claims for these services from January 1, 2015 through the present.
The American Hospital Association had previously urged United to rescind its policy allowing retroactive denial of emergency department claims, stating: “the policy would put patients’ health and wellbeing in jeopardy….” The AHA letter mentioned United’s acknowledgement that the policy was “financially motivated,” but questioned whether savings from the policy would accrue to consumers as claimed by United in light of continued increases in United’s premiums and profits in most markets.