State suit accuses insurer of fraud

This story is republished from STAT, the health and medicine news site that’s a partner to the Globe.

Massachusetts Attorney General Andrea Joy Campbell on Friday sued ­UnitedHealth Group’s insurance subsidiary, UnitedHealthcare, alleging the company intentionally made low-income older adults appear sicker than they were over the past decade to boost its bottom line.

UnitedHealthcare received at least $100 million more than it should have from the Massachusetts Medicaid program due to inflated payments stemming from fraudulent diagnoses, Campbell alleges. Pressure to increase revenue and profit in the Medicaid plan in the state led the company’s top Massachusetts executive to quit, according to the complaint.

This lawsuit is among the first claiming fraudulent documenting, or upcoding, of Medicare patients who are also enrolled in a state Medicaid plan, but it follows a series of investigations that have shined light on the practice in Medicare Advantage. The allegations in Massachusetts raise the prospect that UnitedHealth and other insurers have been using those same upcoding practices on “dual eligibles" — people who are enrolled in both Medicare and Medicaid — and therefore may command attention from state watchdogs.

STAT previously reported how UnitedHealth has leveraged its army of doctors, nurse practitioners, and other providers to increase how much its insurance arm gets paid to cover seniors. Providers said UnitedHealth encouraged, and sometimes pressured, them to document more diagnoses so the company could bill more from the federal government, which pays insurers more for covering sicker people.

Massachusetts runs the Senior Care Options program for low-income people who are older than 65 and on Medicare, and either live at home or in a long-term-care facility. Six health plans participate in the SCO program, which covers about 75,000 people and costs the state roughly $3 billion annually. UnitedHealthcare insures the most people in the program of any company, with about 25,000 enrollees.

UnitedHealth spokesperson Eric Hausman called the lawsuit “meritless" and said it “doesn’t accurately describe our Senior Care Options program."

“The Attorney General is simply wrong that Massachusetts seniors with complex care needs should not be receiving the support and services UnitedHealthcare is helping to provide. We remain focused on working with our state partner to help our members live healthier lives," the statement said.

Similar to Medicare Advantage, insurers in the state’s SCO program are paid based on how sick their members are. Insurers arrange for enrollees to get a health assessment and then assign a health status: level 1 (healthiest and lowest payment rate), level 2 (people with behavioral health and substance use disorders and a higher payment rate), and level 3 (sickest individuals and those who need daily skilled nursing, with the highest payment rate).

The Massachusetts attorney general’s office conducted an investigation and found that from January 2015 to December 2025, UnitedHealthcare routinely classified its members into the higher levels even when those people did not get treatment for their conditions or did not qualify for higher levels.

Last year, Massachusetts paid health insurers roughly $1,300 per month for level 1 members, $1,800 per month for level 2 members, and nearly $4,300 per month for level 3 members, according to the state’s 66-page complaint, filed in Suffolk Superior Court.

Bernadette Di Re, the CEO of United­Healthcare’s plan in Massachusetts, started to feel overt pressure in 2019 from UnitedHealth executives to grow revenue, according to the complaint. Di Re ultimately testified that “pressure from United’s corporate management to increase membership in the plan, reduce costs, ‘cut staff,’ ‘[g]et more numbers,’ and ‘[g]et more money from the state’ as the reason she resigned as CEO of the United SCO plan and left United entirely," the complaint says.