Faith-based investor group pushes UnitedHealth Group to study claim denials in wake of CEO murder

A group representing faith-based shareholders petitioned Eden Prairie-based UnitedHealth Group to develop a report on the human and economic toll that stems from limiting or delaying access to health care at the company’s massive insurance subsidiary.

The Interfaith Center on Corporate Responsibility said Wednesday it has filed a shareholder petition asking the company to evaluate how often prior authorization requirements and denials of coverage from UnitedHealthcare lead to patients delaying or abandoning medical treatment and serious adverse events for individuals.

The New York-based shareholder group, which has petitioned other large publicly traded companies over the years on environmental, social and governance matters, is asking for a vote on the proposal at UnitedHealth Group’s annual meeting for investors, typically held in June.

UnitedHealth Group (UNH) has been the subject of recent media and legislative scrutiny due to its market dominance as well as allegations surrounding its Medicare Advantage health plans and use of artificial intelligence in claims denials, according to a statement from Timnit Ghermay of the Congregation des Soeurs des Saints Noms de Jesus et de Marie.

Anger at the company, and the health insurance industry more broadly, boiled over last month following the murder of UnitedHealthcare CEO Brian Thompson, a Maple Grove resident who was fatally ambushed while walking on a public sidewalk to an investor conference in New York City.

“As the tragic murder of ... Brian Thompson made evident, public outrage over the exorbitant costs and restricted access to health care has reached a dangerous level in our country,” Ghermay, who is director of the Seattle-based Northwest Coalition for Responsible Investment, said in a statement. “Our proposal suggests some introspection by UNH that will help the company and all its stakeholders thrive.”

The company did not comment on the petition. UnitedHealth Group usually includes a statement from management on shareholder proposals that are included in the company’s annual proxy statement, which usually is issued in April.

UnitedHealth Group chief executive Andrew Witty said in a New York Times op-ed in December that insurers must do better in being transparent with patients when coverage for care is denied.

The company said there’s been widespread misinformation about the denial rate at UnitedHealthcare, which is the nation’s largest health insurer. About 90% of medical claims are paid upon submission, the company says, while a small fraction of those requiring further review are due to medical or clinical reasons.

“Health care is both intensely personal and very complicated, and the reasons behind coverage decisions are not well understood,” Witty wrote in the guest column. “We share some of the responsibility for that. Together with employers, governments and others who pay for care, we need to improve how we explain what insurance covers and how decisions are made.”

The shareholder proposal argues that by requiring prior authorizations and denying patient care, UnitedHealthcare could boost short-term revenue but risk the company’s brand and push consumers into debt. It cited a U.S. subcommittee report that found higher denial rates by UnitedHealthcare and two other national insurers for Medicare patients seeking post-acute care; the company says the government requires health plans to give these claims more scrutiny.

A class action lawsuit in 2023 alleged UnitedHealth Group was using a faulty artificial intelligence algorithm to wrongly deny coverage for Medicare patients who need rehabilitation care following hospitalizations. The complaint in the U.S. District Court of Minnesota came as the health news website STAT published an investigation into the company’s use of the technology.

UnitedHealth Group promised a vigorous defense against the lawsuit, saying it had no merit. The technology was not used for coverage determinations, the company said, but instead “is used as a guide to help us inform providers, families and other caregivers about what sort of assistance and care the patient may need both in the facility and after returning home.”

In July, the Wall Street Journal published an investigation alleging UnitedHealthcare and other private insurers in the government’s Medicare Advantage program made hundreds of thousands of questionable diagnoses that triggered an extra $50 billion in taxpayer-funded payments.

UnitedHealth Group pushed back against the newspaper’s reporting as well as a series of federal watchdog reports suggesting the company has stood out from others in its use of questionable practices to boost risk-adjustment payments in Medicare Advantage, a privatized version of the government health insurance program for seniors.

In 2022, the Interfaith Center on Corporate Responsibility pushed shareholder petitions at two major railroads as part of a call for paid sick leave for workers. The group joined others just over a decade ago in a resolution calling for the CEO of investment banking giant JP Morgan Chase to relinquish his role as chairman; the Interfaith Center in 2005 pushed shareholder petitions for drug companies to disclose political contributions.

Health insurance denials have been controversial for decades.

In the wake of Thompson’s killing, many on social media circulated a chart from the consumer website ValuePenguin that listed UnitedHealthcare as having the highest health care claims denial rate in the country. The study looked at data from the health insurance market where individuals buy “marketplace” coverage under the federal Affordable Care Act.

Without commenting specifically on the ValuePenguin report, however, researchers have noted several limitations with this data set.

The government estimates that about 3.6% of Americans in 2022 were buying marketplace coverage, making it a much smaller segment than the employer, Medicare and Medicaid markets. The available data doesn’t include Minnesota and other states that run their own health exchanges rather than using the federal government’s HealthCare.gov website.

What’s more, the data set lacks clear information, researchers say, on what service claims were denied, why insurers blocked coverage and whether medication claim denials were reported along with denials related to health care services. All of this makes any insurer-specific rates difficult to interpret, said Kaye Pestaina, a researcher with California-based KFF.

The individual market data has been noteworthy because it’s one of the only sources of public data on the subject. A KFF survey published in 2023 found broad support for more consumer information on denials.