AG Brown sues United Healthcare, Optum for defrauding Maryland Medicaid Program
Thu, August 27, 2026 at 3:41 PM
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FILE -Maryland Attorney General Anthony Brown speaks during a news conference Tuesday, Sept. 24, 2024, in Baltimore. (AP Photo/Stephanie Scarbrough)
MARYLAND (WBFF) —Maryland Attorney General Anthony Brown filed a lawsuit against UnitedHealth Group (also known as United Healthcare) and Optum, Inc., alleging they defrauded the Maryland Medicaid Program by supplying a defective computer system
Officials said the system, intended for the Maryland Medicaid’s behavioral health program, crashed on its first day of use and never functioned properly, ultimately costing state taxpayers tens of millions of dollars
The crash caused the Maryland Medicaid program to take its system offline for eight months in 2020, jeopardizing the program that provides mental health and substance abuse care to 1.5 million Maryland residents enrolled in Medicaid, according to officials
“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,” AG Brown said in a press release. “My Office will hold United Healthcare and Optum accountable and recover the money Maryland taxpayers are owed.”
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The case involves Optum’s contract with the state’s Medicaid behavioral services program, which spans from 2019 to 2024
Maryland contracted with Optum for $126.9 million to manage the Medicaid program’s Administrative Services Organization, which processes and pays medical providers for behavioral health services
The lawsuit alleges that just a month before Optum’s system was set to go live, it swapped out its own proprietary claims management software and installed an “inadequately-tested, inadequately-vetted system,” made by a subcontractor, officials reported in the press release
The platform crashed immediately and couldn’t distinguish between medically necessary and “frivolous services,” the report said
Officials also reported that Optum denied legitimate claims, failed to provide receipts to major providers like hospitals, paid providers incorrectly, and did not prevent widespread multi-million-dollar fraud in areas such as substance abuse treatment and laboratory urine testing
Officials said these issues jeopardized the entire system, prompting the Department of Health to take it offline and rely on temporary estimates to compensate providers and keep operations running, and likely cost the state tens of millions of dollars
The lawsuit further alleges that Optum’s actions violated the state False Claims Act and seeks to recover approximately $380 million in damages, three times the contract price paid
The lawsuit also alleges breach of contract, unjust enrichment, and intentional misrepresentation
