July 14, 2020

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UnitedHealth Group Inc. was sued Tuesday by two health plan participants who say the insurer’s practice of moving money among the thousands of health plans it administers qualifies as unlawful self-dealing in violation of federal benefits law, according to a proposed class action filed in the District of Minnesota.

The lawsuit, filed by AT&T employee Rick Scott, challenges United’s alleged practice of “cross-plan offsetting,” a billing practice aimed at recouping overpayments that has spurred several legal challenges. Scott says the practice violates the Employee Retirement Income Security Act because it causes ERISA plan assets to be used for purposes other than providing benefits or defraying reasonable administrative expenses.

“United treats the thousands of Plans it administers as one extremely large piggybank, moving more than $1.2 billion among its Plans each year to suit its own interests,” Scott alleges. “Each cross-plan offset violates ERISA, and in most cases, the money ends up in United’s own pocket.”

Cross-plan offsetting is a way of correcting purported health insurance overpayments. Health plan administrators withhold payments owed to medical providers for services rendered to specific patients. The reductions are meant to offset overpayments the providers previously received on account of different patients who participate in other health plans administered by the same company.

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Causes of Action: Fiduciary breach and failure to maintain reasonable claims procedures in violation of ERISA.

Relief: Declaration of fiduciary breach and ERISA violations, injunction prohibiting cross-plan offsetting, restoration of losses and lost profits, interest, attorneys’ fees, and costs.

Potential Class Size: Thousands of participants and beneficiaries in ERISA-governed health plans administered by United whose plan benefits were taken to offset a purported debt owed to a separate plan.

Attorneys: Cohen, Milstein, Sellers & Toll PLLC, Zimmerman Reed LLP, and William K. Meyer of Towson, Md., represent the proposed class.

The complete article can be accessed here.