Ballad Health Sues UnitedHealth Group, Alleging Medicare Advantage Manipulation and Harm to Rural Patients

Health system says insurer overstated illness and denied needed care for patients and hospitals

Ballad Health has filed a federal lawsuit in Greeneville, Tennessee, against UnitedHealth Group, one of the nation’s largest health insurers.  

The system alleges that UnitedHealth has systematically denied, delayed or underpaid for care that physicians determined to be medically necessary, while also overstating to the federal government how sick its members are to collect higher taxpayer-funded payments through the Medicare Advantage program. Through the suit, Ballad Health aims to protect patients, physicians and hospitals across the Appalachian Highlands.

The legal action marks the first time Ballad Health has sued an insurance company, and leaders said the decision was made only after years of attempting to resolve payment and patient care issues without success.

“Taking legal action was our last resort,” said Alan Levine, chairman and CEO of Ballad Health. “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 Health has worked in good faith for years to ensure patients receive the care they need and that providers are treated fairly,” added Anthony Argiropoulos, of Baker Donelson, who represents Ballad Health in the lawsuit. “Unfortunately, UnitedHealth’s practices have made it increasingly difficult to sustain access to care in rural communities, and a safety net system like Ballad Health has no choice but to fight back on behalf of its hospitals.”

Ballad Health serves a largely rural region, where more than 75% of patients rely on government programs such as Medicare or Medicaid or have no insurance at all. Roughly 55% of Ballad Health’s patients are covered by Medicare, and nearly three-quarters of those are enrolled in Medicare Advantage plans – most with UnitedHealth.

“When a major Medicare Advantage insurer manipulates doctors, hospitals and patients in order to avoid living up to the agreement they made to pay for care for seniors, it puts seniors, access to doctors in rural communities and community hospitals at risk,” Argiropoulos said. “These practices have led to longer hospital stays, delayed discharges and unnecessary strain on hospital capacity – all of which hurt patients.”

Ballad Health said UnitedHealth’s denials of post-acute care for seniors can leave patients hospitalized longer than needed, increasing the risk of hospital-acquired conditions, contributing to longer wait times for emergency and inpatient services and, ultimately, costing patients and hospitals more money.

“UnitedHealth has already acknowledged the added cost of prolonged hospital stays by agreeing to reimburse Ballad Health for caring for patients who require longer inpatient care,” added Argiropoulos. “However, the company has failed to honor that commitment and has withheld millions of dollars it agreed to pay.”

The complaint also cites national reports alleging that UnitedHealth subsidiaries have acquired physician practices and used aggressive coding tactics to increase payments from Medicare, while simultaneously pressuring providers to see more patients and reduce spending on care.

“It’s wrong to tell the federal government that patients are sicker to get more taxpayer money and then deny those same patients the care they need,” Argiropoulos said. “That behavior harms seniors, physicians and the very communities these programs are meant to serve.”

Ballad Health said it will not renew its Medicare Advantage contract with UnitedHealth when it expires on June 30, 2027. The decision applies only to that contract; Ballad Health will continue to work with UnitedHealth on its commercial, Medicaid and exchange insurance plans when those contracts come up for renewal.

“Rural systems like ours can’t keep contracting with companies like UnitedHealth on Medicare Advantage when the math no longer works,” said Levine. “Our mission is simple – to keep care local, keep hospitals open and ensure access to needed specialists and services."

View the legal filing: Ballad Health v. UnitedHealth [PDF file, 1.17 MB]