Insurer wants Danbury Hospital to 'revise' suit

DANBURY -- The largest health insurer in the country has responded to Danbury Hospital's multimillion-dollar lawsuit over underpaid claims by asking a judge to order a "revised" legal complaint that addresses the insurance company's specifications.

Without a revised legal complaint that provides more specifics, a lawyer for UnitedHealthcare in state Superior Court argued this week, Danbury Hospital's lawsuit amounts to "little more than a contractual dispute over the rate of reimbursement for an undefined universe of healthcare claims."

"(Danbury Hospital's) allegation that United underpaid its claims is the core of this dispute. That said, (the hospital) has provided no information regarding the underlying claims or how United allegedly allocated the (reimbursement formulas) improperly," writes United attorney Jaime Welsh. "Without more, United is left to guess what it did wrong, and it cannot intelligently respond to (the hospital's) complaint."

The attorney is responding to a lawsuit filed in April by Danbury Hospital claiming that two United subsidiaries breached the hospital's contract and violated Connecticut's unfair trade practices law by underpaying the hospital for Medicare Advantage claims, beginning in 2023.

United's request for a revision, which had not been answered in court by Danbury Hospital as of Wednesday afternoon, singles out language in the hospital's lawsuit and asks for backup to support the allegations.

"United ... requests (Danbury Hospital) plead some facts to support the spurious and unsupported allegation that United engaged in 'bad faith' to 'settle the claims for less than a reasonable person would have expected,' United's argument reads. "The allegation that United underpaid claims with 'such frequency' to be part of a 'bad faith' design to improperly settle claims is little more than a legal conclusion unsupported by facts."

United's request for a revised complaint marks the health insurer's first response in court to Danbury Hospital's underpayment allegations.

"(T)he complaint lacks specificity," United's argument reads. "United cannot assess whether it might have defenses to the alleged conduct, and what those defenses might be."

Danbury Hospital disagrees, arguing in its lawsuit that, "On January 1, 2023, United began to repeatedly underpay Danbury Hospital for Medicare Advantage claims provided in connection with the facility agreement and repeatedly failed to comply with the terms of the facility agreement."

Medicare Advantage is a privately run version of the government-funded Medicare program, mostly for people 65 and older.

Specifically, Danbury Hospital said in its lawsuit, United didn't pay what it owed the hospital due to "improper allocation" of two reimbursement formulas that take into account regional costs of living, and regional costs of providing healthcare, such as labor.

On that point the hospital was not specific enough, United said.

"(The hospital) alleges that United 'began to underpay' (the hospital) for Medicare Advantage Claims in 2023, but (the hospital) provides no other facts to support its conclusion about how United supposedly underpaid these claims," the argument reads. "Indeed, the complaint contains no facts about the underlying claims (the number of claims at issue; the types of claims at issue - outpatient or inpatient; or even a list ... that could be used to put United on notice about the actual healthcare claims in dispute)."

The hospital is seeking a minimum of $1 million for each of four counts of alleged violations, including punitive damages, lawyers' fees and interest.

United said that was not specific enough either.

"United cannot intelligently prepare to defend against the damages claimed by (the hospital) because United is unaware of the damages (the hospital) is seeking for each count," the health insurer said.

The lawsuit comes at a time when the hospital has been in the headlines.

Danbury Hospital, along with Norwalk and Sharon hospitals, are now part of a New York-based health care system called Northwell. A state oversight agency approved the $20 billion deal in April, in part because the hospitals' former parent company, Nuvance, was experiencing extreme financial hardships.

Northwell pledged to invest $1 billion over five years in Nuvance hospitals, which include three hospitals in New York's Hudson River Valley.