Zuckerman Spaeder Client Sues UnitedHealth for Underpayment of Telehealth Services

Zuckerman Spaeder LLP today filed a new lawsuit on behalf of a plaintiff who alleges that UnitedHealthcare Company and United Behavioral Health (“United”) have been underpaying reimbursements for health care services provided through telehealth platforms. The putative class action lawsuit alleges that, at the onset of the COVID-19 pandemic when telehealth demand was increasing dramatically, United began deliberately covering out-of-network telehealth services at a lower rate than promised in written plan terms.

On March 31, 2020, in reaction to the rise in telehealth services due to pandemic-related office closures, the Centers for Medicare and Medicaid Services (“CMS”) increased its payment rate for most telehealth services so that it matched the rate for office-based services. United’s plan documents promise that, for services provided by out-of-network providers, reimbursements are based on 110 percent of the published rates allowed by CMS. However, according to the new lawsuit, United chose to ignore the CMS increase and continue paying the lower rate. 

The plaintiff had been receiving in-person psychotherapy services from an out-of-network provider but moved to telehealth services in July 2020. While United had committed to pay 110 percent of the CMS rate, she received the exact amount she would have been allowed for a telehealth visit prior to the CMS rate increase. Even after the plaintiff appealed and notified United that it had used the incorrect rate, United has continued to underpay benefits for the covered telehealth services the plaintiff has received. 

The lawsuit alleges that United’s policy, which prioritizes its own financial interests over the interests of plan holders, violates its fiduciary duties under the Employee Retirement Income Security Act (“ERISA”) and its duty to comply with the written terms of its plans.

“At a time when so many people were struggling and the need for telehealth was skyrocketing, United seized an opportunity to boost its profits,” said Zuckerman Spaeder partner Caroline R. Reynolds. “With a huge proportion of outpatient mental health services moving online in 2020—not to mention a wide range of physical health services as well—United reaped tremendous savings by paying for those services at a lower rate. This lawsuit will prove that the insurer’s decision to ignore the written terms of its plans and seek financial gain at the expense of plan holders clearly violates its ERISA obligations.”

The lawsuit seeks class certification because United administers thousands of ERISA health insurance  plans and its refusal to adopt the published Medicare rates for office-based telehealth services led it to “systematically and uniformly underpa[y] benefits due for such services under all of these plans.” And because United’s policy remains in place, the lawsuit calls for injunctive relief that enjoins the insurer from continuing to underpay for telehealth services. 

The complaint was filed by Zuckerman Spaeder partners Ms. Reynolds, D. Brian Hufford, Jason S. Cowart, and Andrew N. Goldfarb, along with co-counsel Meiram Bendat of Psych-Appeal, Inc., and Elizabeth Acee from Barclay Damon LLP.

A copy of the complaint can be found here

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Katie Munroe
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