Claims Adjudication

Healthcare News of Note: DOL sues UnitedHealth Group subsidiary for claim denials

August 18, 2023 3:50 pm
  • The U.S. Department of Labor recently sued UMR Inc., the nation’s largest third-party healthcare claims administrator, for denials involving emergency department services and urinary drug screening.
  • Twenty-two of U.S. News & World Report’s Best Hospitals also made the publication’s honor roll, which recognizes hospitals for demonstrating exceptional breadth of excellence across clinical specialties.
  • Substantial resources would be needed to implement a comprehensive approach to addressing health-related social needs that fall largely outside of existing federal financing mechanisms.

Over the past few weeks, I have found these industry news stories that should be of interest to healthcare finance professionals.

1. DOL files suit against a UnitedHealth Group subsidiary

The U.S. Department of Labor (DOL) on July 31 announced legal action against UMR Inc., the nation’s largest third-party claims administrator and a subsidiary of UnitedHealth Group (UHG), for its denials of emergency department (ED) and urinary drug screening claims.

DOL announced it had filed the lawsuit with a Wisconsin federal court, seeking remedies for more than 2,100 self-funded employee benefit plans for which claims were improperly denied dating back to January 2015. The suit also requests an injunction to prevent future improper claims denials.

UMR’s claims adjudication procedures for ED services did not comply with the Affordable Care Act’s prudent layperson standard, which amended the Employee Retirement Income Security Act (ERISA) by requiring insurers to cover ED services based on a patient’s symptoms rather than the diagnosis.

The claims administrator allegedly denied claims based solely on diagnosis codes, with the affected claimant receiving an explanation of benefits “that [had] very limited information” and did not reference “the specific plan provisions or specific rule on which the determination was based.”

For urinary drug screening claims, UMR is said to have denied claims across the board without determining medical necessity. The administrator did approve such claims starting in August 2018 if the service was provided in the ED, but the lawsuit alleges that change was made only because UMR calculated that 98% of claims decisions in that setting were overturned on appeal. Also, in October 2019 the company changed the denial code from 914 (lack of medical necessity) to 515 (requesting more medical records).

DOL seeks “appropriate remedial and equitable relief” for affected benefit plans, including by requiring UMR to reform its processing procedures for the relevant claims and re-adjudicate all claims that were denied or partially denied since 2015. The company also should be enjoined from committing future ERISA violations and should grant appropriate monetary relief to affected parties, the lawsuit states.

In a statement responding to the suit, parent company UHG indicated the processes at issue have been addressed already.

“We have been in ongoing conversations with the DOL regarding this matter and will continue to defend our position vigorously,” the company said.

— Nick Hut, HFMA senior editor

2. Which 22 hospitals were named to the U.S. News national honor roll?

Twenty-two of the 484 hospitals ranked among U.S. News & World Report’s 2023-2024 Best Regional Hospitals also made the publication’s national Honor Roll, according to an Aug. 1 news release.

“Best Hospitals evaluates hospitals in more than 30 medical and surgical services, with the objective of providing patients with data-driven decision tools,” states the release. Honor Roll hospitals are recognized “for demonstrating exceptional breadth of excellence across clinical specialties,” the release says.

“Hospitals were awarded Honor Roll points if they ranked in one or more of the 15 specialties that U.S. News evaluates – more points for higher rankings – and if they were rated ‘high performing’ in one or more of the 21 procedures and conditions,” wrote authors of this Aug. 1 U.S. News article.

Honor Roll hospitals

The U.S. News Best Hospitals Honor Roll awardees, listed alphabetically, included:

  1. Barnes-Jewish Hospital, St. Louis
  2. Brigham and Women’s Hospital, Boston
  3. Cedars-Sinai Medical Center, Los Angeles
  4. Cleveland Clinic
  5. Hospitals of the University of Pennsylvania-Penn Presbyterian, Philadelphia
  6. Houston Methodist Hospital
  7. Johns Hopkins Hospital, Baltimore
  8. Massachusetts General Hospital, Boston
  9. Mayo Clinic, Rochester, Minnesota
  10. Mount Sinai Hospital, New York City
  11. New York-Presbyterian Hospital-Columbia and Cornell, New York City
  12. North Shore University Hospital at Northwell Health, Manhasset, New York
  13. Northwestern Memorial Hospital, Chicago
  14. NYU Langone Hospitals, New York City
  15. Rush University Medical Center, Chicago
  16. Stanford Health Care-Stanford Hospital, Stanford, California
  17. UC San Diego Health-La Jolla and Hillcrest Hospitals, San Diego
  18. UCLA Medical Center, Los Angeles
  19. UCSF Health-UCSF Medical Center, San Francisco
  20. University of Michigan Health-Ann Arbor
  21. UT Southwestern Medical Center, Dallas
  22. Vanderbilt University Medical Center, Nashville

3. New study estimates cost of intervening in health-related social needs

Researchers determined it would cost “$60 per member per month,” to implement evidence-based interventions to address social needs identified in primary care practices, according to results of a study published May 30 by JAMA Internal Medicine.

“We observed both low enrollment in existing programs, especially for food and housing interventions for which inadequate program capacity may limit participation of eligible people, and narrow eligibility criteria for existing transportation and care coordination interventions that excluded many in need,” wrote the study authors.

“This suggests that major changes to the way social services are delivered in the US may be needed if we are to respond appropriately to needs identified through health care-based screening,” they added.

Additional findings

The researchers also found of the $60 (in 2022 dollars) PMPM tally:

  • $27, or 45.8%, could be financed by existing mechanisms for federally funded interventions
  • $33, or 54.2%, would be required as new funding to expand interventions to address those not eligible or eligible but not enrolled (e.g., due to inadequate program capacity).

“Substantial resources would be needed to implement a comprehensive approach to addressing social needs that fall largely outside of existing federal financing mechanisms,” noted the authors.

HFMA insight

HFMA provides content on social determinants of health, population health and cost effectiveness of health, including:

  • The May 15 Healthcare News of Note blog post “5% of U.S. adults are forgoing healthcare due to transportation barriers.”
  • The Sept. 23, 2022, articleHow healthy food incentives can help solve our nation’s problem with unhealthy eating,” by Eric Reese, PhD, editor and writer.
  • The May 27, 2022, Q&ARoad to value begins with addressing social determinants of health,” by Eric Reese.

HFMA bonus content

Listen to the Aug. 14 Voices in Healthcare Finance episode “Fighting for systemic change by putting the patient first,” hosted by Erika Grotto, senior editor. In this episode, Rami Karjian and Raphael Rakowski of Medically Home discuss emphasizing patients over all else in healthcare.

Read “Congress puts the community benefit standard for nonprofit hospitals under the microscope,” an Aug. 14 article by Nick Hut, senior editor.

Check out the “FY 2024 Hospice Payment Rate Update Final Rule Summary.” For access to additional summaries, regulatory items and accounting guidance, visit HFMA’s Regulatory and Accounting Resources page.



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