Massachusetts sues UnitedHealth unit over alleged $100mn Medicaid fraud

Massachusetts has sued a UnitedHealth Group (UNH) insurance unit, accusing it of defrauding the state's Medicaid program of more than $100mn by making elderly patients appear sicker than they were in order to inflate payments.

The lawsuit, filed by state attorney general Andrea Joy Campbell, alleges that UnitedHealthcare Insurance manipulated the health status of MassHealth members enrolled in its Senior Care Options plan to boost profit and advance what she described as the company's "growth-at-all-costs strategy."

Campbell said the largest US health insurer exaggerated diagnoses for patients aged 65 and older between 2015 and 2025 through a practice known as "upcoding" — recording conditions as more severe than they were — and failed to reimburse MassHealth for the resulting overcharges. The state is seeking to recoup the overpayments and obtain triple damages.

Her office said several former nurses reported that UnitedHealthcare encouraged upcoding, including by diagnosing occasional headaches as migraines. It also alleged that the insurer failed to repay MassHealth after internal reviews found many patients had been improperly diagnosed.

UnitedHealth, based in Eden Prairie, Minnesota, called the lawsuit "meritless." The attorney general "is simply wrong that Massachusetts seniors with complex care needs should not be receiving the support and services UnitedHealthcare is helping to provide," the company said in a statement.

The case adds to mounting pressure on UnitedHealth, which has been working to rebuild investor confidence after the December 2024 killing of UnitedHealthcare's chief executive prompted broad public criticism of health insurers' practices. The company operates in Massachusetts as UnitedHealthcare Community Plans of Massachusetts.