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Getting the latest healthcare news for you
Maryland's Attorney General is taking UnitedHealth Group's Optum unit to court, alleging it defrauded the state's Medicaid behavioral health program with a defective computer system. The system crashed on day one, went offline for eight months, and never worked properly — denying legitimate claims and missing millions in fraud. The state is seeking roughly $380 million in damages.
Maryland's Attorney General Anthony Brown has filed a lawsuit against Optum, a subsidiary of UnitedHealth Group, alleging the company defrauded the state's Medicaid behavioral health program by delivering a deeply flawed computer system. The state paid $126.9 million for Optum to manage its Administrative Services Organization program from 2019 to 2024 — but the system reportedly crashed on its very first day and was never fully functional.
The fallout was significant: the system had to be taken offline for eight months in 2020, threatening access to mental health and substance abuse services for 1.5 million Medicaid enrollees. The AG's office alleges Optum quietly swapped its own proprietary claims system for an inadequately tested subcontractor-built one in the final stretch before launch — leading to denied legitimate claims, incorrect provider payments, and a failure to catch "rampant, multi-million-dollar fraud." Optum has pushed back strongly, saying the lawsuit "fails to account for the complexities of the program's implementation."
By the Numbers:
Why it matters: This lawsuit spotlights the real-world consequences when Medicaid IT infrastructure fails — not just financial losses for the state, but disrupted access to critical mental health and addiction services for vulnerable populations.
