UnitedHealthcare will pay $15.7M in settlement of denial-of-care charges

UnitedHealthcare, the largest U.S. health insurer, has settled federal and New York state charges it illegally denied coverage to thousands of patients suffering from mental health problems and substance abuse.

The U.S. Department of Labor said on Thursday that UnitedHealth Group, the insurer's parent company, will pay about $15.7 million, including $13.6 million in restitution and a $2.1 million fine, to settle with that agency and New York Attorney General Letitia James.

UnitedHealth Group, based in Minnetonka, is the largest public company in Minnesota.

Authorities accused UnitedHealthcare of violating federal and state laws by imposing more restrictive limits on coverage and treatment for mental health and substance abuse disorders than it imposed for physical health conditions.

UnitedHealthcare also was accused of overcharging patients for out-of-network mental health services by reducing reimbursements.

Without admitting liability, UnitedHealthcare agreed to stop using algorithms, including in a program called ALERT, that required extra layers of review before continuing mental health treatment and often resulted in coverage being cut off.

Ensuring treatment for mental health and substance abuse is "something I believe in strongly as a person in long-term recovery," Labor Secretary Marty Walsh, who was once an alcoholic, said in a statement.

UnitedHealthcare said in a statement it was pleased to settle, and no longer used the challenged practices, including ALERT.

It also said it was committed to providing care, including "behavioral support," and reimbursement to policyholders consistent with federal and state rules.

James said more than 20,000 New Yorkers will receive $9 million from the settlement, and the state will receive $1.3 million of the fine.

She called access to mental health and substance abuse treatment "more critical than ever before," citing the pandemic and rising overdose deaths.