A May 29, 2026, press release by the Massachusetts Attorney General (“A.G.”) states that the A.G. has filed a lawsuit against United Healthcare. The press release states, in part:

[The A.G. alleges that United Healthcare] falsely manipulated the health status of MassHealth members enrolled in its Senior Care Options (SCO) plan to secure higher payments from the Commonwealth. The complaint estimates that the scheme defrauded MassHealth, the state’s Medicaid program, of at least $100 million.

“The state’s managed care plans need to act in good faith on behalf of their members and the financial resources of our state’s Medicaid program. Our investigation found that United Healthcare knowingly violated these obligations by manipulating health assessments to increase its profits,” said AG Andrea Joy Campbell. “This lawsuit sends a clear message that no company is above the law, and my office will hold companies accountable for exploiting vulnerable residents and misusing taxpayer dollars.”

MassHealth’s SCO program serves eligible members age 65 or older living in designated service areas across Massachusetts. Enrollees must receive a comprehensive in-home clinical assessment to determine the member’s health status and assign them one of three levels of care, ranging from least serious and lowest payment rate (Level 1) to most serious and highest payment rate (Level 3). United is the largest provider of SCO plans in Massachusetts.

The Attorney General’s Office (AGO) alleges that United manipulated the health statuses of its members to increase profits in three principal ways. First, United submitted assessments of members in the United SCO Plan that led to their classification as Level 2, which is reserved for members with behavioral health or substance use disorders. United classified members by identifying, in its submissions to MassHealth, that members had diagnoses like depression or anxiety, even though those members lacked any corresponding diagnosis or treatment associated with behavioral health or substantive use disorders. Second, the AGO further alleges that United improperly assessed many members in the United SCO Plan with health conditions satisfying Level 3, reserved for members with the most serious health conditions, even though those members did not qualify for Level 3 services. Beginning in 2018 and continuing into 2019, United became aware through a series of internal reviews that many of its members at Level 3 had been improperly classified. United never disclosed to MassHealth that it had been improperly paid at higher rates for these members prior to their being downgraded, nor has it repaid MassHealth for any of the improperly inflated payments United received while the members were incorrectly classified at Level 3. Third, United submitted assessments to MassHealth for members in the United SCO Plan that represented that those members needed daily skilled nursing services. Despite these representations, most of those members did not need or receive daily skilled nursing services. As a result, United received higher payments from MassHealth for these members than it should have.

The AGO alleges that these were intentional failures, the result of a “growth at all costs” strategy employed by United that incentivized and encouraged its field nurses to code MassHealth members as sicker or less able than they were. 

In prior Medtrade Monday articles, we have provided examples of alleged fraud perpetrated by Medicare Advantage (“MA”) companies. The Massachusetts lawsuit against United Healthcare is one more example of scrutiny of action by MA companies.

It is the author’s opinion that when Congress passed a law 30 years ago creating MA, the following occurred:

• The Medicare program (formerly HCFA, now CMS) figuratively wiped its hands and said: “Thank goodness this is off our plate.”
• CMS exercised essentially no oversight of MA companies.
• MA companies quickly fell into the “middleman state of mind” in which the companies are motivated to (i) obtain as much money as possible from CMS and (ii) pay as little money as possible to health care providers…resulting in the MA companies “pocketing the spread.”
• The lack of supervision, coupled with the desire to increase the “spread,” has resulted in fraudulent activities. The Massachusetts lawsuit is just one example of alleged fraudulent activities.

In order to reign in the abuses in the MA space, DME suppliers need to join other health care providers in proactively taking steps to curb fraud. These steps include:

• Supporting the efforts of AAHomecare’s Payor Relations Council to facilitate government supervision of MA companies.
• Supporting federal and state legislative initiatives designed to curb fraud by MA companies.
• Working with AAHomecare, VGM, state DME associations, and other stakeholders to publicize the fraudulent activities in the MA space.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Texas with a national healthcare practice. He represents pharmacies, infusion companies, HME companies, manufacturers, and other healthcare providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].