Investing.com -- Massachusetts filed a lawsuit on Friday against a UnitedHealth insurance unit, alleging the company defrauded the state's Medicaid program of more than $100 million by inflating the severity of illnesses among older patients.

Shares in the company fell 1.4% at $377.34 in afternoon hours of trading.

Andrea Joy Campbell, the Massachusetts attorney general, stated that UnitedHealthcare Insurance, operating as UnitedHealthcare Community Plans of Massachusetts, falsely manipulated the health status of MassHealth members enrolled in its Senior Care Options plan to obtain higher payments.

Campbell alleged that UnitedHealth submitted inaccurate diagnoses for patients aged 65 and older between 2015 and 2025 to receive increased payments from MassHealth and support the company's growth strategy.

UnitedHealth called the complaint "meritless" in a statement to Reuters.

The Attorney General’s Office (AGO) also alleged that United inflated members’ health statuses to boost profits. First, United reported United SCO Plan members as Level 2—reserved for those with behavioral health or substance use disorders—by citing diagnoses like depression or anxiety, even when members had no such conditions or treatment.