UnitedHealth Group is seeking to dismiss a lawsuit filed by Johnson City, Tenn.-based Ballad Health over alleged “Medicare Advantage manipulation,” arguing the health system is bound by arbitration agreements and filed the case to generate publicity.
In a Dec. 4 court filing, UnitedHealth asked a federal court in Tennessee to compel arbitration or dismiss the complaint for lack of jurisdiction and failure to state a claim.
Ballad sued UnitedHealth in October, alleging the insurer engaged in systematic denials of medically necessary care and underpayment for services provided to Medicare Advantage members across its 19 hospitals. Ballad is seeking more than $65 million in damages and asked the court to invalidate arbitration provisions in its contracts with UnitedHealth.
UnitedHealth is arguing that Ballad’s predecessor organizations (Mountain States Health Alliance and Wellmont Health) signed facility participation agreements in 2010 and 2014, respectively, that require them to resolve disputes through binding arbitration. Ballad has acknowledged it is bound by those contracts, according to the filing.
“We are here, not because Ballad Health has a good-faith basis for challenging the arbitration agreements themselves or arbitration as a method for resolving disputes, but because it wanted to publicize its dispute with [UnitedHealth], the insurer’s attorneys wrote. “This litigation is a PR stunt — not a legitimate challenge to arbitration.”
Beyond the arbitration argument, UnitedHealth contends that Ballad’s state-law claims attempt to regulate coverage determinations governed by federal standards. The insurer also argues the complaint lacks sufficient factual detail to support its breach-of-contract and fraud claims.
“Taking legal action was our last resort,” Alan Levine, chairman and CEO of Ballad, said in October. “This is not our first choice; it’s not a choice we’ve had to make before. But we had to take action because we believe UnitedHealth’s behaviors are so harmful to patients, doctors and community hospitals.”
Ballad has said it will not renew its Medicare Advantage contract with UnitedHealth when it expires June 30, 2027.
