DOL Hits UnitedHealthcare With Lawsuit, Could Cost Millions In Court Awarded Compensation

The Department of Labor has sued UnitedHealthcare Insurance Co. UNH, claiming that they are fraudulently disregarding mental health insurance claims from consumers. If the case is ruled against United Healthcare, they would be required to reprocess tens of thousands of past claims. 

What Happened: The US Secretary of Labor, Marty Walsh, is leading a lawsuit against United Healthcare. The Mental Health Parity and Addiction Equity Act requires that insurance providers treat mental health and physical health problems with equal validity when awarding money for insurance claims. 

United Healthcare used "broader and more aggressive" processes to award compensation to mental health patients and implemented more restrictions on mental health medical costs than physical health costs. 

However, according to the Department of Labor, United Healthcare has been treating patients' mental health treatment insurance claims more harshly than requests for physical treatments like physical therapy or surgery. Additionally, they have also allegedly been compensating customers for mental health medical care at lower rates than physical medical care. 

Why It's Important: United Healthcare is currently valued at more than $400 billion. If they are found to have violated the Mental Health Parity and Addiction Equity Act, the consequences could be grave. 

The lawsuit essentially claims that United Healthcare has been conducting fraudulent activity since American consumers have not been allowed access to funds for mental health treatment. 

United Healthcare's health insurance plans are also subject to the terms set forward in the Employee Retirement Income Security Act. Their plans cover more than 25 million Americans, which is almost 8% of all Americans of all ages. 

If United Healthcare loses the suit, consumers who have been denied mental health care would be entitled to receive it. Additionally, United Healthcare would have to change its internal processes going forward regarding mental health care. 

United Healthcare would have to cough up potentially tens of millions to reevaluate past mental health claims and spend at minimum hundreds of millions annually going forward in awarding rightful mental health care compensation.