UnitedHealthcare and dialysis company reach settlement

A dialysis company plans to pay $32 million to Minnetonka-based UnitedHealthcare as part of a settlement agreement after the nation's largest health insurer alleged in lawsuits against the clinic operator schemes to receive higher payments for services.

American Renal Associates (ARA), which is based in Massachusetts, did not admit wrongdoing or liability as part of the agreement, which calls for the parties to negotiate final terms by Aug. 1.

In conjunction with the agreement announced Monday, American Renal Associates would serve as an in-network dialysis clinic for UnitedHealthcare enrollees in 26 states plus the District of Columbia.

"We are pleased to have reached a resolution on this matter and we look forward to building a more cooperative relationship that enables us to collaborate on high-quality care for dialysis patients," the companies said in a joint statement.

UnitedHealthcare first brought a lawsuit against ARA in July 2016. At the time, the lawsuit was a prominent example of how health plans were alleging the individual market under the federal Affordable Care Act was being distorted by a disproportionate number of people seeking coverage for expensive services.

Earlier this year, UnitedHealthcare filed a second lawsuit against ARA that alleged a scheme to get people with employer coverage to receive out-of-network care from the dialysis company, which would then bill the insurer "at exorbitant rates," the lawsuit states.

ARA said both lawsuits were without merit and vowed to vigorously defend itself.

In connection with the agreement announced Monday night, ARA said it expected to share certain information and follow certain procedures with respect to patients covered by UnitedHealth Group, which is the UnitedHealthcare parent company.

"The company expects to make total settlement payments under the final settlement agreement of $32 million, inclusive of administrative fees and fees for plaintiffs' counsel, in five installments, beginning on Aug. 1, 2018," ARA said in a regulatory filing. "The company also expects to enter into a three-year national network agreement with United by Aug. 1, 2018, that provides for specified reimbursement rates for patients."

In the first lawsuit, UnitedHealthcare alleged the dialysis company counseled patients on how to receive premium assistance from a nonprofit group, and then obtain coverage via United insurance available on government-run health exchanges rather than the public Medicare or Medicaid insurance programs. Whereas Medicare and Medicaid pay a few hundred dollars to ARA for a dialysis session, United alleged in a court filing, out-of-network payments from the insurer to ARA could run more than $4,000.

The dialysis company countered that the lawsuit contained baseless claims and multiple factual errors, including bills from another provider. The litigation appeared to parallel the insurer's lobbying on proposed regulations to force high-cost patients into Medicaid health plans, a company official told the Star Tribune in a 2016 statement.

"The litigation is nothing more than a self-serving attempt by [United] to deny chronically ill dialysis patients … access to financial assistance that the federal and state governments have clearly approved as appropriate," the official said in the statement.

Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck