Lab Loses Round 1 of Reimbursement Lawsuit against Unitedhealth Group
Case: A lab that performed urine drug testing on out-of-network Medicare Advantage and Medicaid patients sued Unitedhealth Group for carrying out bad faith and statistically invalid claims audits and wrongfully withholding over $1 million in reimbursements for lab tests. United contended that the claims were legally invalid. Significance: The Illinois federal court agreed and tossed all of […]

Case: A lab that performed urine drug testing on out-of-network Medicare Advantage and Medicaid patients sued Unitedhealth Group for carrying out bad faith and statistically invalid claims audits and wrongfully withholding over $1 million in reimbursements for lab tests. United contended that the claims were legally invalid. Significance: The Illinois federal court agreed and tossed all of the claims:
- The lab didn’t have standing to sue United for breach of contract because there was no contract between the parties;
- The complaint didn’t allege that patients had assigned their contractual rights to the lab; and
- The claims for bad faith were invalid because they weren’t properly pled under state law.
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