UnitedHealth Group is suing the state of Minnesota over a law that bans for-profit Medicaid managed-care providers from participating in the state's Medicaid program.
Filed in Hennepin County Aug. 2, UnitedHealth alleged Minnesota lawmakers violated the state's constitution by passing a "jumbo omnibus," at the end of its legislative session. The ban on health-maintenance organizations was included in a bill that included provisions on vaccines, traffic cameras, college admission requirements and several other changes.
"None of the legislators had time to read it, much less any members of the public or press. Nor were legislators given time for debate," attorneys for UnitedHealth wrote. "The Jumbo Omnibus was on the floor of each chamber for barely 10 minutes. It was passed on a party-line vote minutes before midnight."
Minnesota had banned for-profit companies from participating in its Medicaid program until 2017, when it reversed course. UnitedHealth was awarded a contract to manage care for Minnesota enrollees in 2022. In June, the Minnesota Department of Human Services informed UnitedHealth Group its contract would be terminated at the end of 2024 due to the new law.
"UnitedHealthcare is challenging legislation that limits choice for individuals, families and children in Minnesota," a UnitedHealth spokesperson told Becker's. "Minnesotans deserve the right to choose among health plans that offer the broadest access to care, the most innovative services and the highest quality benefits to meet their health care needs."
Attorneys for UnitedHealth asked the court to declare the portion of the omnibus banning for-profit HMOs unconstitutional, and prevent the state from ending its contract with UnitedHealth based on the law.
UnitedHealth is the only for-profit HMO currently contracted to provide Medicaid services in Minnesota, according to its lawsuit. It manages care for around 32,000 Medicaid enrollees, according to the Star Tribune, a small slice of the state's 1.4 million Medicaid beneficiaries.
UnitedHealth will also have to end its Medicare Advantage offerings for individuals eligible for Medicaid and Medicare in Minnesota, attorneys alleged in the lawsuit.
"The UnitedHealth family will also suffer reputational harm in the communities and industry more broadly from being forced to terminate six health plans and close an entire business line," attorneys wrote.
Headquartered in Minnesota, UnitedHealth employs more than 18,000 people in the state, according to the complaint. The filing states that the company will be forced to lay off dozens of Minnesota workers if it loses its Medicaid contract with the state.
A spokesperson for Minnesota Attorney General Keith Ellison, who was also named in the suit along with Jodi Harpstead, commissioner of the Department of Human Services, told the Star Tribune the attorney general's office will respond to the lawsuit in court.
In a statement shared with Becker's, John Connolly, assistant comissioner for healthcare administration in Minnesota's Department of Human Services, said the department is " following the clear directive of the law as recently amended by the legislature."
"The agency is now prohibited from contracting with for-profit HMOs, which disqualifies UnitedHealthcare from participation," Mr. Connolly said. "We cannot renew the contracts and comply with the law. If the legislature reverses course in the future and once again allows for-profit entities to be eligible for contracts, DHS would consider proposals from UHC.”