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Ballad Health has filed a federal lawsuit in Greeneville, Tennessee, against insurer UnitedHealth Group for allegedly denying necessary care.
In the lawsuit filed Tuesday, the health system alleged that UnitedHealth has denied, delayed or underpaid for care that physicians determined to be medically necessary, while also overstating to the federal government how sick its members are to collect higher taxpayer-funded payments through the Medicare Advantage program.
Ballad said UnitedHealth’s denials of post-acute care for seniors can leave patients hospitalized longer than needed, increasing the risk of hospital-acquired conditions and contributing to longer wait times for emergency and inpatient services.
Ultimately, this costs patients and hospitals more money, the system said.
The complaint also cites reports alleging that UnitedHealth subsidiaries have acquired physician practices and used aggressive coding tactics to increase payments from Medicare, while pressuring providers to see more patients and reduce spending on care.
WHAT'S THE IMPACT
Ballad Health serves a largely rural region, in which more than 75% of patients rely on government programs such as Medicare or Medicaid or have no insurance.
Roughly 55% of Ballad Health’s patients are covered by Medicare, and nearly three-quarters of those are enrolled in Medicare Advantage plans – most with UnitedHealth, the system said.
Ballad Health said it will not renew its Medicare Advantage contract with UnitedHealth when it expires on June 30, 2027. The decision applies only to that contract; the system will continue to work with UnitedHealth on its commercial, Medicaid and exchange insurance plans when those contracts come up for renewal, it said.
“Taking legal action was our last resort,” said Alan Levine, chairman and CEO of Ballad Health, 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.”
UHG did not immediately respond to a request for comment.
THE LARGER TREND
Over the summer, the Department of Justice’s criminal healthcare fraud unit launched an investigation into how UnitedHealth Group is allegedly deploying doctors and nurses to gather diagnoses that bolster its payments.
Former employees reportedly told investigators about UnitedHealth’s efforts to encourage the documentation of certain lucrative diagnoses, including testing patients, implementing procedures to ensure that medical conditions were captured and sending nurses to patients’ homes.
UnitedHealth fought back against the charges, saying it stands firmly behind the integrity of its Medicare Advantage business, and that its operations “are governed by strict federal regulations and subject to rigorous oversight, driving transparency and compliance with CMS requirements.”
Later that summer UnitedHealth Group subsidiary UnitedHealthcare said it would be exiting certain Medicare Advantage plans due to higher-than-expected medical costs.
In Q2, UnitedHealth Group surpassed expectations on revenue but once more missed the mark on profit. Profit was just $3.4 billion, down from the $4.2 billion the company recorded in 2024.