UnitedHealthcare and AARP are facing a lawsuit regarding alleged Medicare supplement denials, according to a Feb. 22 complaint filed with the U.S. District Court for New Jersey.
The organizations collaborate on a handful of AARP-branded insurance products, including Medigap plans. The lawsuit alleges UnitedHealthcare denies Medigap claims based on a requirement not outlined in its policies, such as that a provider must participate in Medicare.
“AARP and United actually intended to deny countless claims by purporting to cite a ‘phantom,’ nonexistent condition in the certificate of insurance as they have done for decades with the active and constructive knowledge of each other,” the complaint said. “Defendants frivolously contend that the ‘phantom’ condition, while nowhere stated in the certificate of insurance, somehow requires the healthcare provider to participate in Medicare or accept Medicare as payment in order for reimbursement to be made. That assertion by AARP and United is entirely false, but is nonetheless systematically invoked by defendants to wrongfully deny countless claims for medically necessary healthcare.”
AARP receives royalties from its working relationship with UnitedHealth. The lawsuit alleges the groups fraudulently solicited membership renewals and insurance policy sales while rejecting valid claims.
Damages could exceed $5 million and be coupled by possible $30,000 penalties under New Jersey law due to the targeting of “vulnerable consumers” in the Medicare population.
“This lawsuit seeks payment for noncovered services and is meritless,” UnitedHealth said in a statement shared with Becker’s March 11.
Over the years, UnitedHealth and AARP have faced a handful of lawsuits over their partnerships. In 2018, a lawsuit alleged the companies diverted $400 million per year through a Medigap premium rebate scheme.
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