Red Oak Hospital in Houston has filed a string of lawsuits against self-insured employers alleging the companies entered into unlawful agreements with UnitedHealthcare that allow the insurer to improperly divert their employees' healthcare funds.
One of the suits is against Marathon Oil. Red Oak Hospital alleges the company engaged in a scheme to embezzle and convert self-insured plan assets. According to the complaint, Marathon has an agreement with United that allows the insurer to use funds set aside for Marathon employees' healthcare expenses to pay medical bills incurred by other companies' workers. For instance, Red Oak Hospital alleges the agreement allowed United to withhold funds that were supposed to be paid toward a Marathon employee's hospital bill because the insurer claimed it overpaid for care provided to patients covered by the Houston Zoo's plan.
The agreement between Marathon and United "blatantly ignores, overlooks and directly creates prohibited conflicts of interest permitting United to withhold plan assets and convert them to its own use/benefit," Red Oak Hospital alleges.
Even after receiving multiple notices from Red Oak, Marathon and United continued to conceal the "unlawful embezzlement and conversion of plan assets, camouflaged as 'overpayment recoupment or offset,'" according to the complaint.
The hospital claims Marathon's agreement with United violates the Employee Retirement Income Security Act, which requires employers that offer self-insured plans to set aside funds to pay workers' claims and to administer plans in the sole interest of members.
UnitedHealthcare isn't named as a defendant in the suit, but company spokesman Dustin Clark told the Houston Chronicle that United disputes the hospital's allegations.
Red Oak filed a similar lawsuit June 21, alleging Macy's and its self-funded plan administered by Cigna concocted an intricate scheme to abstract and embezzle plan assets.
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