A federal judge has dismissed Ballad Health’s lawsuit accusing UnitedHealth Group of denying and underpaying Medicare Advantage claims, ruling the dispute must go to arbitration.
Johnson City, Tenn.-based Ballad sued UnitedHealth in October, alleging the insurer spent years denying valid claims, delaying payment and overstating the severity of patient illnesses to collect higher MA reimbursements. The 19-hospital system sought more than $65 million in damages and asked the court to throw out the arbitration clauses in its contracts with the company. UnitedHealth then moved to compel arbitration in December, calling the lawsuit “a PR stunt.”
UnitedHealth argued that Ballad’s predecessor organizations, Mountain States Health Alliance and Wellmont Health System, which merged to form Ballad in 2018, each signed agreements requiring “any and all disputes” to go before a three-person arbitration panel.
“Those are serious allegations,” U.S. District Judge Clifton Corker wrote Sept. 14. “But the seriousness of those claims does not change the parties’ prior agreements about how to resolve those claims. Ballad Health promised to bring them to an arbitrator, and it identifies no rule of Tennessee law that permits the Court to release it from that promise.”
Ballad previously said it would not renew its MA contract with UnitedHealth when it expires on June 30, 2027, but said it would continue to contract with the insurer on its commercial, Medicaid, and ACA plans.
A spokesperson for Ballad shared the following statement:
“We are pleased the court recognized the seriousness of Ballad Health’s allegations, including our claims that UnitedHealth spent years denying valid claims, delaying payments and manipulating the Medicare Advantage program at the expense of patients, providers and taxpayers. The court also acknowledged that these allegations raise important public-interest concerns affecting the health of the communities we serve. While the court determined these claims must be heard in arbitration, it did not rule on the merits of the case. Therefore, Ballad Health shall submit its claims to arbitration and proceed accordingly.
We remain fully committed to pursuing these claims in arbitration and holding UnitedHealth accountable for practices we believe have harmed patients, physicians, hospitals and rural communities. Ballad Health filed this action only after years of attempting to resolve these issues without litigation, and we will continue to vigorously advocate for our patients, our providers and the communities who depend on local healthcare access.”
Becker’s has reached out to UnitedHealth for comment.
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