University of Maryland Medical System Files Lawsuit Against Maryland Physicians Care MCO Seeking $15 Million In Unpaid Services

The University of Maryland Medical System (UMMS) today filed a complaint in the Circuit Court for Baltimore City against Maryland Physicians Care MCO (MPC), seeking to recover in excess of $15 million for services provided to more than 15,000 patients. MPC, a Medicaid managed care organization (MCO), improperly denied claims for services including emergency department visits, patients treated for COVID-19 and babies born prematurely and treated in hospital neonatal units – all among the most vulnerable patients served by the System.

UMMS, a private not-for-profit health system that consists of 11 academic, community and specialty hospitals, provides over 25 percent of hospital-based care in the state. In January 2018, MPC entered into a participating Health Provider Agreement with UMMS to provide health care services to its members.

“Our hospitals serve as critical health care access points for vulnerable populations across Maryland. Payment was denied for essential care that UMMS provided to more than 15,000 people, including premature babies with special needs and patients recovering from heart attacks, gunshot wounds, strokes and other life-threatening conditions,” said Mohan Suntha, MD, MBA, President and Chief Executive Officer of UMMS, noting one in four Marylanders receives coverage through Medicaid programs such as MPC.

According to the lawsuit, MPC improperly denies payment for medical services, particularly Emergency Department services, provided to its members by UMMS. MPC denies these claims at alarmingly high rates, which exceed the denial rates of other payors, including other Maryland Medicaid MCOs. “It is inexplicable and inexcusable for UMMS to not have been compensated for providing this care to thousands of Marylanders by an organization that has contractual and statutory responsibility to manage their members’ health outcomes,” Dr. Suntha added.

MPC is one of nine Medicaid managed care organizations in the state, serving exclusively individuals enrolled in Maryland Medicaid’s mandatory managed care program, HealthChoice. Each MCO is paid a per-member, per-month capitation fee by the Maryland Department of Health to cover medical benefits and administration costs to Marylanders who qualify for Medicaid.

Because UMMS is the largest hospital system in Maryland, with the broadest geographic reach and facilities that range from small regional medical centers to Shock Trauma, UMMS’s participation in MPC’s network is critical to MPC’s ability to meet its network adequacy obligations and to attract and retain members. Individuals choosing among Medicaid MCOs in Maryland are much less likely to choose a Medicaid MCO that does not include UMMS as an in-network provider.

According to the filing:

❖MPC has engaged in a longstanding, ongoing, deliberate, and systematic practice of denying timely and complete payment for covered medical services provided to MPC members by UMMS – many of whom are among the most vulnerable patients treated by the System.

❖A large majority of the claims submitted by UMMS and wrongfully denied in whole or part by MPC are claims seeking payment for emergency services. MPC’s approach to emergency service claims is particularly egregious, demonstrating a willful, deliberate, and systematic pattern of denials that flagrantly disregard the coverage obligations and standards that Medicaid MCOs are specifically required to uphold for emergency services.

❖MPC has broken its legal and contractual obligations. MPC adjudicates – and denies – emergency claims using a flawed and unlawful coverage standard, including automatically denying claims not on its auto-approval list and relying on retrospective clinical assessments instead of the legally required standard known as the “prudent layperson” (or PLP) Standard.

❖While the majority of the claim denials at issue arise from the denial of ED services, MPC takes unjustified, legally meritless, and medically unsupportable approaches to coverage decisions in other UMMS care settings. A large percentage of the claim denials in this action arise from the refusal of MPC to pay UMMS for medically necessary care.

The filing also reports that MPC consistently refused to pay for primary behavioral health care provided in UMMS emergency departments and denied claims where a diagnosis included COVID-19 as well as for services provided to unhoused individuals.

MPC’s emergency department denial practices do not stem from a reasonable disagreement over medical judgment, but reflect a broad, bad-faith refusal to acknowledge the realities of patient care – driven by a pursuit of enhanced profitability, the complaint states.

Patient Examples

• MPC member “Patient A” sought care from an UMMS Emergency Department a few days after being involved in a motor vehicle accident. Patient A reported chest pain and severe abdominal pain and rated his pain a 10 out of 10. The treating physician ordered a CT scan of the patient’s chest and another of the patient’s thoracic spine. MPC determined that those symptoms were not “acute” symptoms of sufficient severity to justify the CT scans. MPC paid for the lowest level of EMTALA screening and denied payment for the CT scans.
• In another case, MPC member “Patient B” presented to an UMMS ED with swelling, discomfort, and a history of recurrent infection requiring recent hospitalization. That recent hospitalization had involved multiple open wounds and a MRSA infection. The UMMS physician documented hypertension, range of motion difficulties, and rashes and other skin conditions. For MPC, none of this deserved medical attention. In MPC’s words, the “Prudent layperson standard was not met.” MPC denied the claim not once but twice following an internal appeal.
• MPC denied the necessity of continued hospital care for an MPC member who had just survived cardiac arrest and a gunshot wound on the grounds that the member was no longer in enough pain to justify hospitalization. Even though the patient was still recovering from traumatic injury, had undergone multiple procedures, and was being monitored for complications including unstable respiratory and cardiac status, MPC summarily concluded - based on checkbox criteria - that hospital-level care was no longer warranted.
• MPC denied coverage for a patient with multiple complex and active conditions - including a recent stroke, HIV, COVID-19, and sepsis - while that patient was still fighting to stabilize. That patient was hospitalized for more than three months and underwent several invasive procedures, including repairing a broken leg. Despite this background, MPC repeatedly denied coverage for portions of the stay, asserting - without any credible clinical basis - that the patient could have been safely discharged.
• MPC has ignored the clinical judgment of front-line providers and denied claims for life-saving treatment even for the most fragile newborns. In one case, MPC consistently disputed and denied coverage for care for an infant born three months prematurely, weighing barely more than a pound who required continuous ventilatory support, nutrition support, and round-the-clock NICU monitoring for months. This neonate had been exposed to fentanyl and cocaine in utero. She was diagnosed with extreme respiratory distress, recurrent apnea, severe feeding intolerance, and numerous other comorbidities associated with extreme prematurity. Her condition remained fragile throughout, with complications arising at nearly every stage of her care.
• A newborn who had already endured a traumatic birth was admitted to the NICU in respiratory distress and remained hospitalized for months due to persistent instability. The child required ventilatory support, tube feeding, frequent apnea monitoring, and interdisciplinary care management throughout her admission. Multiple times, her discharge was delayed because her vital signs, respiratory function, and nutritional tolerance remained too fragile for her to be discharged. Yet, MPC denied broad segments of her hospitalization. MPC disregarded the treating clinicians’ judgment and substituted its own cost-focused logic for the urgent clinical reality of the patient’s condition. These denials were not just inappropriate—they were cruel. They demonstrate that MPC’s corporate profit motives override the medical needs of the sickest and smallest patients in the State.
• A premature infant born at just 28 weeks was transferred into UMMS from another hospital’s NICU for evaluation and surgical placement of a gastrostomy tube, due to ongoing feeding failure and persistent growth concerns. Here, the child had a history of congenital lung dysplasia, had required intubation and surfactant therapy, and remained on supplemental nutrition. Despite being clinically stable, he required continuous nutritional support, preoperative evaluation, and active monitoring until the feeding tube could be placed - a timeline that was determined in part by operating room and surgical team availability.

About the University of Maryland Medical System

The University of Maryland Medical System (UMMS) is an academic private health system, focused on delivering compassionate, high-quality care and putting discovery and innovation into practice at the bedside. Partnering with the University of Maryland School of Medicine and University of Maryland, Baltimore who educate the state’s future health care professionals, UMMS is an integrated network of care, delivering 25 percent of all hospital care in urban, suburban and rural communities across the state of Maryland. UMMS puts academic medicine within reach through primary and specialty care delivered at 11 hospitals, including the flagship University of Maryland Medical Center, the System’s anchor institution in downtown Baltimore, as well as through a network of University of Maryland Urgent Care centers and more than 150 other locations in 13 counties. For more information, visit www.umms.org.