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Tennessee health system Ballad Health is suing UnitedHealthcare, alleging the insurer “systematically abused and manipulated the taxpayer-funded Medicare Advantage Program.” The health system claims United Healthcare extracted “enormous profit” at the expense of taxpayers, patients and the providers needed to provide access to care, "particularly in rural and underserved communities.” Why It Matters Ballad Health alleges UnitedHealthcare’s actions have resulted in more than $65 million in damages over the last five years. “The outgrowth of this abuse is [UnitedHealthcare’s] improper and systematic denials of claims for medically necessary care that Ballad Health provided and continues to provide to the elderly, low-income and otherwise vulnerable patients of Virgina and Tennessee’s Appalachian region,” the lawsuit states. According to a press release from Ballad Health, this lawsuit is the first time Ballad Health has sued an insurance company. Health system leadership said the decision was made “only after years of attempting to resolve payment and patient care issues without success.” “Taking legal action was our last resort,” Ballad Health CEO and Chairman Alan Levine said in a statement. “This is not our first choice; it’s not a choice we’ve had to make before. But we had to take action because we believe UnitedHealth’s behaviors are so harmful to patients, doctors and community hospitals.” What To Know Ballad Health operates 19 hospitals in Northeast Tennessee and Southwest Virginia. It was formed in 2018 with the goal of “preserving access to hospitals and health care in a predominantly rural region” with a merger between Mountain States Health Alliance and Wellmont Health System. The health system serves a largely rural area, where more than 75 percent of patients rely on government programs such as Medicare or Medicaid or have no insurance at all, according to Ballad Health. In the lawsuit, Ballad notes that the population it serves is also significantly older than the national average and that the 21 counties that make up its primary service area have median household incomes below both the state and national averages. Attorney Anthony Argiropoulos, who represents Ballad Health in the lawsuit, said in a statement that Ballad Health has worked in good faith for years to ensure patients receive the care they need and providers are treated fairly. “Unfortunately, UnitedHealth’s practices have made it increasingly difficult to sustain access to care in rural communities, and a safety net system like Ballad Health has no choice but to fight back on behalf of its hospitals,” he said. “When a major Medicare Advantage insurer manipulates doctors, hospitals and patients in order to avoid living up to the agreement they made to pay for care for seniors, it puts seniors' access to doctors in rural communities and community hospitals at risk." Argiropoulos adds that these practices have led to longer hospital stays, delayed discharges and unnecessary strain on hospital capacity, "all of which hurt patients.” Ballad Health said UnitedHealthcare’s denials of post-acute care for seniors can leave patients hospitalized longer than needed, therefore increasing the risk of hospital-acquired conditions and contributing to longer wait times for emergency and inpatient services, which is ultimately costing patients and hospitals more money. In the lawsuit, Ballad Health outlines the three ways UnitedHealthcare carries out its “abusive” policies and practices. The first involves “upcoding,” a practice in which UnitedHealthcare allegedly “manipulates patients’ diagnoses to maximize its profits from the United States government.” The second is referred to as the “Optum loophole” to circumvent the Medical Loss Ratio requirements in the Affordable Care Act. Finally, Ballad Health accuses UnitedHealthcare of “systematically and grossly delaying and underpaying medical providers” which provide care to Medicare Advantage enrollees and others insured with UnitedHealthcare. What Happens Next Ballad Health said it will not renew its Medicare Advantage contract with UnitedHealthcare when it expires on June 30, 2027. The decision applies only to that contract, Ballad Health said. The health system will continue to work with UnitedHealthcare on its commercial, Medicaid and exchange insurance plans when those contracts come up for renewal. “Rural systems like ours can’t keep contracting with companies like UnitedHealth on Medicare Advantage when the math no longer works,” Ballad Health CEO Alan Levine said in a statement. “Our mission is simple – to keep care local, keep hospitals open and ensure access to needed specialists and services.” Newsweek reached out to UnitedHealthcare for comment. Have an announcement or news to share? Contact the Newsweek Health Care team at health.care@newsweek.com.
