UnitedHealthcare has reached an agreement to end a class action lawsuit accusing the healthcare giant of violating employee benefits law by refusing to cover liposuction treatment, promising to reimburse policyholders and changing its coverage policy.
In a motion for preliminary approval filed in California federal court, UnitedHealthcare Inc. and class representative Mary Caldwell urged U.S. District Judge William Alsup to sign the agreement, saying it would limit the risks and expense of prolonged litigation.
“The parties agree that it is in their best interests, and in the best interests of the court, to conserve resources and avoid the unnecessary commitment of time and expense related to future events in the case,” the motion states.
Caldwell filed the lawsuit in 2019 after United refused to cover his liposuction
procedure that her doctor considered a necessary treatment for her lipedema, a chronic condition that causes fatty tissue to build up in her lower body. Her costume achieved class certification in December 2020.
United denied coverage of the procedure, saying it had not proven helpful in treating his condition, Caldwell said. The health insurer ignored medical evidence about the benefits of liposuction and violated the Employee Retirement Income Security Act by refusing to cover it, she claimed.
The agreement calls for United to implement a new liposuction medical policy to treat lipedema. The new policy will consider liposuction to be “reconstructive and medically necessary” to treat lipedema when certain criteria are met, according to court documents.
After reviewing pre-service claims and post-service claims under the new policy, United will also provide coverage to class members who are still covered by the insurer.
United will also reimburse band members who no longer have coverage and have paid for liposuction costs, subject to certain caps.
As part of the settlement, United also agreed to pay up to $875,000 for costs and attorneys’ fees, according to court documents.
Group attorney Robert Gianelli of Gianelli & Morris ALC expressed satisfaction with the settlement, saying in an email to Law360 on Thursday that “this matter has been hotly contested.”
“The plaintiff obtained favorable rulings on class certification and the denial of United’s motion for summary judgment, which led to an excellent settlement for class members,” Gianelli said. “They can now be operated on for their lipedema conditions following United’s agreement to change their ‘unproven’ position on this operation.”
A spokesperson for UnitedHealthcare also said the company is pleased to have reached a settlement agreement.
“UnitedHealthcare regularly reviews published clinical evidence for each medical policy as part of its annual review process and will update these policies based on accepted medical practice standards and guidelines,” Maria Gordon Shydlo said in an email to Law360.