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UnitedHealthcare liposuction claims class action lawsuit overview:
- Who: A federal judge has denied a class action settlement between UnitedHealthcare and patients.
- Why: Patients allege that the insurance provider wrongly denied them coverage for required liposuction, saying that the lawyers’ fees are a “red flag indicating a potentially collusive settlement.”
- Where: The class action lawsuit is pending in California federal court.
A federal judge has denied a class action settlement between UnitedHealthcare and patients who allege that the insurance provider wrongly denied them coverage for required liposuction, saying that the lawyers’ fees are a “red flag indicating a potentially collusive settlement.”
U.S. District Judge William Alsup said in the order denying approval that the class counsels’ $875,000 fees under a clear sailing agreement saw the lawyers getting “vast amounts of cash but the class members get merely a cosmetic settlement.”
“This violation stands out as a sore thumb and a red flag,” he wrote.
UnitedHealthcare denied medically necessary liposuction treatment
The proposed settlement follows a 2019 class action lawsuit filed by lead plaintiff Mary Caldwell who alleged that United refused to cover her liposuction procedure, which her doctor said was a necessary treatment for her lipedema.
Lipedema is a chronic condition that causes fat tissues to build up in the lower body. In the claim, Caldwell said that United ignored medical evidence about liposuction’s benefits, Law360 reports.
The class action was certified in 2020.
Although the settlement reached would require United to instate a new medical policy covering liposuction for lipedema as “reconstructive and medically necessary” certain criteria were met, and reimburse those who had paid out of pocket for liposuction to treat the disease, Judge Alsup said there were also issues with who would and would not get coverage on top of the issues with the “clear sailing” agreement.
Clear sailing agreements allow attorney fees to be paid separately from class funds, which the judge said carried a risk of enabling a defendant to pay class counsel excessive fees and costs in exchange for counsel accepting an unfair settlement on behalf of the class.
“The proposed settlement is further unfair to class members because it is impossible to know if they will qualify under the new criteria or not,” Judge Alsup noted in his order denying the deal.
He added that the court sees such a large fee for the attorneys, little benefit to the class members, and substantial downsides to the class — “namely, that class members are forced to accept the new medical criteria and cannot challenge them (even when they do not qualify under the new criteria) and that potentially deserving class members will be excluded.”
“For these reasons, this order denies preliminary approval for the proposed settlement,” he wrote.
This isn’t the only class action lawsuit UnitedHealthcare is facing. Earlier this month, the insurance provider was hit with a class action lawsuit by patients who say United denied them coverage for needed anesthesia.
In 2010, UnitedHealthcare settled a class action lawsuit for $350 million after being accused of issuing inadequate reimbursements to its members for covered services provided by out-of-network providers using Ingenix databases.
Do you have insurance with UnitedHealthcare? Tell us what your experience has been like in the comments section below.
The plaintiff is represented by Adrian J. Barrio, Joshua S. Davis and Robert S. Gianelli of Gianelli & Morris ALC.
UnitedHealthcare is represented by David W. Skaar, Harmony R. Gbe and Michael M. Maddigan of Hogan Lovells.
The UnitedHealthcare liposuction claims class action lawsuit is Mary Caldwell v. UnitedHealthcare Insurance Co. et al., Case No. 3:19-cv-02861, in the U.S. District Court for the Northern District of California.
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