Danbury Hospital sues health insurance giant for repeatedly failing to pay Medicare Advantage claims

News-Times – Tuesday, April 22, 2025
By Rob Ryser

DANBURY – Danbury Hospital has filed a multimillion-dollar lawsuit against UnitedHealthcare, claiming the health insurance giant breached its contract and violated Connecticut’s unfair trade practices law by underpaying the hospital for Medicare Advantage claims.

“Despite being on notice for the underpayment issue, United has failed to properly pay the outstanding balance due on Medicare Advantage claims,” says a complaint filed by the hospital in state Supreme Court in Danbury. “United (has) engaged in unfair claim payment practices by repeatedly breaching the facility agreement and underpaying claims in bad faith.”

The lawsuit, filed March 4, names two subsidiaries, UnitedHealthcare Insurance Co. and UnitedHealthcare of New England Inc., which are both owned by UnitedHealth Group, the largest health insurer in the country.

Officials at UnitedHealth did not immediately respond to requests for comment on Monday.

The hospital’s lawsuit, which seeks at least $1 million each on four counts of alleged violations, also seeks punitive damages, lawyers’ fees and interest.

“On January 1, 2023, United began to repeatedly underpay Danbury Hospital for Medicare Advantage claims provided in connection with the facility agreement and repeatedly failed to comply with the terms of the facility agreement and on each occasion did so on bad faith,” the lawsuit says.

Details about the facility agreement were not provided in the complaint, except that the hospital “became an in-network provider of medical services to United members and beneficiaries” in 2008.

The disagreement, which covers the 2023 calendar year, centers on “United’s failure to properly pay the Medicare Advantage claims,” according to the complaint.

Medicare Advantage is a privately run version of the government-funded Medicare program, mostly for people age 65 and older.

The lawsuit, which had not been answered in court by UnitedHealthcare on Monday, comes at a time when both the hospital and the health insurance giant have been in the headlines.

The parent company for Danbury Hospital as well as Norwalk and Sharon hospitals is now part of the much larger New York-based health care system Northwell. A state oversight agency approved the $20 billion deal earlier this month, in part because Danbury-based parent company Nuvance was bleeding hundreds of millions of dollars annually in losses and in part because Northwell pledged to invest $1 billion in Nuvance over five years.

UnitedHealthcare parent company UnitedHealth Group made news last week when it announced lower-than-expected first-quarter results, and its stock took a dive, according to published reports.

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