United Healthcare Settles Liposuction Coverage Battle

UnitedHealthcare struck a deal to end a class action lawsuit accusing the health care giant of violating benefits law by refusing to cover liposuction treatment, promising to reimburse policyholders and change 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 off on the deal, saying it would limit the risks and expenses of a prolonged litigation.

“The parties agree that it is in their best interest, and in the interest of the court, to conserve resources and avoid the unnecessary commitment of time and expense related to the upcoming events in the case,” the motion stated.

Caldwell filed the suit in 2019 after United refused to cover her liposuction

procedure that her doctor considered a necessary treatment for her lipedema, a chronic condition that causes fat tissues to build up in the lower body. Her suit scored class certification in December 2020.

United denied coverage for the procedure, saying it had not proved to be helpful to treat her condition, Caldwell said. The health insurer ignored medical evidence about liposuction’s benefits and violated the Employee Retirement Income Security Act by refusing to cover it, she claimed.

The deal calls on United to put into effect a new medical policy for liposuction to treat lipedema. The new policy will consider liposuction “reconstructive and medically necessary” to treat lipedema when certain criteria are met, according to court documents.

After reviewing pre-service requests and post-services claims under the new policy, United will also provide coverage for the class members who still have coverage under the insurer.

United will also reimburse class members who no longer receive coverage who paid out- of-pocket expenses for liposuction, subject to certain caps.

As part of the deal, United also agreed to pay up to $875,000 for attorney fees and costs, court documents show.

Class counsel Robert Gianelli of Gianelli & Morris ALC expressed his satisfaction with the settlement, saying in an email to Law360 on Thursday that “this case was hard fought.”

“Plaintiff secured favorable rulings on class certification and on the denial of United’s motion for summary judgment, leading to an excellent settlement for the class members,” Gianelli said. “They can now receive surgery for their lipedema conditions as a result of United’s agreement to change its ‘unproven’ position on this surgery.”

A UnitedHealthcare spokesperson also said the company was pleased to have reached a settlement agreement.

“UnitedHealthcare routinely 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.