Hospitals sue UnitedHealth over claims practices

NEW YORK—A civil racketeering lawsuit filed by two New York hospitals charges that UnitedHealth Group Inc. and several of its affiliates systematically defrauded hospitals and UnitedHealth members with alleged schemes to deny legitimate claims.

New York-based Jamaica Hospital Medical Center Inc. and Flushing Hospital Medical Center Inc. filed the suit in U.S. District Court in Brooklyn, naming Minneapolis-based UnitedHealth, several top UnitedHealth officers, Oxford Health Plan (NY) Inc. and other UnitedHealth units.

The complaint alleges that UnitedHealth has pursued a fraudulent plan to boost its own profits by deceiving members of its health plans and shortchanging health care providers.

UnitedHealth plans have repeatedly provided members with inaccurate information about participating providers, and have shifted costs to members and providers by falsely claiming that participating providers are "out of network," the suit charges.

The two hospitals also charge that UnitedHealth plans "distorted" the utilization review process, delaying reviews while hospitals treated members but later denying payments and depriving the hospitals of an effective right of appeal.

A UnitedHealth spokesman said the hospitals' charges are without merit. The spokesman added that similar charges brought by the hospitals in a New York state court have been ordered arbitrated. David P. Rosen, the hospitals' president and chief executive officer, countered that the racketeering suit's allegations go beyond those in the state court case and are not subject to arbitration provisions of the hospitals' UnitedHealth contracts.

United Healthcare Insurance Co. of New York, a UnitedHealth unit named in the lawsuit, recently settled charges by the New York Attorney General that it misled members about the providers participating in one of its plans. United Healthcare said computer errors caused providers to be included in its directories mistakenly over a five-year period. The company agreed to several business reforms and to pay restitution to plan members.