UnitedHealth class action alleges company collects fee from phantom savings

UnitedHealth savings class action lawsuit overview: 

• Who: Alexandra Popovchak and Oscar Gonzalez filed a class action lawsuit against UnitedHealth Group Inc. 
• Why: Popovchak and Gonzalez claim UnitedHealth has made billions of dollars by collecting a “savings fee” from healthcare plans using “phantom savings” the provider says it obtained for plan members. 
• Where: The class action lawsuit was filed in New York federal court. 

UnitedHealth Group collects a “savings fee” from healthcare plans that it calculates using “phantom savings” the provider claims to have obtained for plan members but that don’t actually exist, a new class action lawsuit alleges. 

Plaintiffs Alexandra Popovchak and Oscar Gonzalez claim UnitedHealth Group “deliberately ignores” readily-available data for “competitive fees” when determining the amount of benefits due for covered services from out-of-network providers. 

Popovchak and Gonzalez argue UnitedHealth bases its determinations for the amount of benefits due on “repricer data” that is “based on the deeply discounted rates insurance companies have paid for the service.” 

UnitedHealth — which is accused along with its repricers of making billions of dollars from the alleged scheme — then “deems just a fraction of the out-of-network provider’s billed charge as eligible for reimbursement under the plan,” according to the UnitedHealth class action. 

UnitedHealth unable to force out-of-network providers to accept discounted rate, class action says

The plaintiffs argue that, since UnitedHealth is not able to force out-of-network providers to accept their discounted rate as full payment, plan members are left “financially and legally liable for the unpaid portion of the provider’s bill.” 

“United takes for itself as much as one-third of the difference between the provider’s billed charge and the discounted rate United determined to be ‘eligible’ for payment under the plan,” the UnitedHealth class action states. 

The plaintiffs want to represent a nationwide class of participants and beneficiaries of a self-funded employer-sponsored health benefit plan affected by UnitedHealth’s alleged scheme. 

UnitedHealth is accused of violating the Employee Retirement Income Security Act (ERISA). The plaintiffs are demanding a jury trial and requesting declaratory relief and for UnitedHealth to “make good” on any losses incurred by class members due to its alleged fiduciary breaches. 

A separate class action lawsuit was filed against UnitedHealth in October 2021 by North Carolina residents arguing the provider refused to reimburse patients and providers for anesthesia services. 

Do you have a healthcare plan administered by UnitedHealth? Let us know in the comments.

The plaintiffs are represented by D. Brian Hufford, Jason S. Cowart, Caroline E. Reynolds and Trillium Chang of Zuckerman Spaeder LLP, and Leslie Howard of Cohen Howard LLP. 

The UnitedHealth savings class action lawsuit is Popovchak, et al. v. UnitedHealth Group Inc., et al., Case No. 1:22-cv-10756, in the U.S. District Court for the Southern District of New York. 

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