Maryland Sues UnitedHealth Group Over $380 Million Medicaid System Crash

Maryland's Attorney General Anthony G. Brown has filed a lawsuit against UnitedHealth Group and its subsidiary Optum, Inc., for allegedly providing a defective computer system to Maryland Medicaid's behavioral health program that crashed on its first day of use in 2020.

The crash was so severe that the state had to take its system off-line for eight months, putting the program that provides mental health and substance abuse care to 1.5 million Marylanders on Medicaid in jeopardy.

The lawsuit alleges that Optum swapped out its own proprietary claims management software with an inadequately-tested and vetted system made by a subcontractor just months before it was slated to go live.

The problems with the new system included failing to distinguish between medically necessary and frivolous services, denying legitimate claims, and paying incorrect amounts to providers. The state Department of Health officials eventually took the system offline and used ad hoc estimates to pay providers, which likely cost the state tens of millions of dollars.