BALTIMORE, Md. — Maryland's Attorney General announced on Thursday that the state is suing United Healthcare, accusing the company and a subsidiary of providing a defective computer system to Maryland's Medicaid program.
Attorney General Anthony Brown, in the suit, said that the insurance company and its subsidiary, Optum, had provided the system to Maryland Medicaid's behavioral health program, but alleged it crashed on the first day it was used.
The computer system, the Attorney General's Office said, "never functioned properly, costing state taxpayers tens of millions of dollars."
According to a Thursday release, the state contracted with Optum to manage Maryland's behavioral services program from 2019 to 2024.
The suit alleges that the company "swapped out its own proprietary claims management software and installed an inadequately-tested, inadequately-vetted system made by a subcontractor" months before it was set to go live.
That system immediately crashed, resulting in the state's Medicaid program going offline for 8 months in 2020 and costing the state millions, according to the Office of the Attorney General.
"It also denied legitimate claims, failed to provide receipts to large-scale providers like hospitals that, in turn, struggled to run their businesses, paid incorrect amounts to providers, and failed to block rampant, multi-million-dollar fraud in areas such as substance abuse treatment and laboratory urine testing," the release said.
The state is now seeking $380 million in damages from Optum under Maryland's False Claims Act.
“Marylanders in crisis and the providers who care for them rely on Maryland’s Medicaid program for essential mental health and substance abuse care. Optum provided a defective system that failed them for years,” said Brown. “My Office will hold United Healthcare and Optum accountable and recover the money Maryland taxpayers are owed.”
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