The Ohio Chamber of Commerce has filed a lawsuit against healthcare giant UnitedHealth, alleging the conglomerate abandoned its contract to administer a Chamber-backed health plan for its members.
The suit, filed on September 1 in federal court in Columbus, claims UnitedHealth then used inside information to trick employers into believing the Chamber plan was being terminated. Furthermore, the Chamber alleges the company would not allow it access to its own information. According to the lawsuit, "United withheld the Chamber Program’s own information from it" which prevented the Chamber Program from responding to and competing with United’s alleged actions.
UnitedHealth Group did not immediately respond to a request for comment regarding the lawsuit. However, a July 9 letter from a regional UnitedHealth executive to Chamber leaders, included in the court file, indicates the company plans to fight the accusations. Kurt Lewis, United’s CEO for Ohio, Kentucky, and Indiana, stated in the letter, “United rejects the allegations and conclusions contained in (a letter from the Chamber), including the assertion that United has acted improperly with respect to Trust Proprietary Business Information…”
The Ohio Chamber Health Benefit Program offers a group health plan designed to be attractive to small businesses, with about 20% of the association's members participating, the suit claims. The Chamber had hired United HealthCare Services Inc., a division of UnitedHealth Group, to serve as its third-party administrator (TPA), handling services such as claims processing and billing for the employee benefit plans.
The lawsuit asserts that even though its contract was set to run through the end of this year, United stopped providing these TPA services. Subsequently, United began offering its own insurance plans directly to the Chamber’s member businesses that had been participating in the Chamber program. The suit alleges United used its access to Chamber Program information, participating employers, and their brokers to divert members from the Chamber’s offerings to its own health benefit products. The lawsuit further claims United "co-opted the Chamber Program’s logo, name, and branding on United’s own website and marketing materials," causing confusion among members and brokers who believed United products were Chamber Program products or that United spoke for the Chamber Program.
The lawsuit accuses United of nine separate improprieties, including violations of the state’s Deceptive Trade Practices Act, false advertising, breach of contract, and breach of fiduciary duty. The Chamber is asking the court to enjoin United from continuing the alleged actions and is seeking both compensatory and punitive damages.
UnitedHealth Group is a major player in the U.S. healthcare market, ranking as the third-largest corporation by revenue in the country. It owns the nation’s largest health insurer, is the largest owner of doctors’ offices, and operates the third-largest prescription middleman. The company also offers ancillary services, like being a third-party administrator.
Antitrust activists have raised concerns that such extensive "vertical integration" creates a motive for health conglomerates to drive up prices by giving their own businesses an advantage over competitors. Similar accusations have been made against CVS Health and Cigna-Express Scripts.
This legal action comes a little over a year after the Ohio Chamber sided with UnitedHealth and two other health conglomerates against legislation sought by Ohio’s independent and small-chain pharmacies. For over a decade, independent and small-chain pharmacists in Ohio and elsewhere have accused these larger companies of using their drug-middleman operations to force them out of business, leading to numerous closures.