Optum Maryland: What Behavioral Health Practices Need to Know About Claims

In this article▾

1. What was Optum Maryland?
2. What went wrong with the Optum Maryland claims system?
3. What is the current status of the Optum Maryland lawsuit?
4. Optum Maryland vs. Carelon: what changed?
5. How Maryland behavioral health practices should handle claims now
6. How to investigate a legacy Optum Maryland claim
7. What if Optum-era records were transferred incorrectly?
8. What Maryland practices should know about audits and overpayment demands
9. Maryland's CCBHC demonstration adds another operational consideration
10. A practical checklist for Maryland behavioral health billing teams
11. Frequently asked questions
12. The bottom line

Optum Maryland was the Administrative Services Organization (ASO) for Maryland's Public Behavioral Health System from January 2020 through December 2024. Its system handled administrative functions for Medicaid and state-funded behavioral health services, including authorization and claims processing.

The system's implementation became the subject of years of provider concerns and state scrutiny. In August 2026, Maryland's attorney general sued Optum and UnitedHealth Group in Baltimore City Circuit Court, alleging that the claims system was defective and that the state paid $126.9 million for a service that never functioned properly. Optum disputes the allegations and has asked the court to dismiss the case. Maryland Attorney General's announcement · Optum's motion to dismiss, as reported by Becker's.

There is an important operational distinction for providers today: Carelon Behavioral Health replaced Optum as Maryland's behavioral health ASO on January 1, 2025. Practices handling current Maryland Public Behavioral Health System claims should use the current Carelon processes, while legacy Optum-era claims, audits, payment discrepancies, and transferred records may require additional investigation. Maryland Department of Health: Behavioral Health Coverage.

This guide explains what Optum Maryland did, what the lawsuit alleges, how the transition affects billing operations, and what practices should do when a claim, payment, authorization, or audit involves the legacy system.

What was Optum Maryland?

Optum Maryland was the contractor responsible for operating Maryland's behavioral health ASO from January 1, 2020, through December 31, 2024. The ASO supported the state's Public Behavioral Health System, which serves people receiving covered specialty mental health and substance use services through Medicaid and other public funding arrangements.

An ASO is not the same thing as a Medicaid managed care organization (MCO). Maryland uses a behavioral health ASO to administer specialty behavioral health services that are carved out of managed care. The state establishes program rules and covered services; the ASO performs designated administrative functions, including supporting authorization and claims workflows.

Maryland's current guidance identifies Carelon as the behavioral health ASO. Medicaid enrollment through ePREP and registration with Carelon are both required for behavioral health specialists seeking payment for covered specialty behavioral health services. Read Maryland's current provider guidance.

What Optum's system handled

During its contract period, Optum Maryland supported administrative processes such as:

• Provider access to the Maryland behavioral health system.
• Authorization requests and authorization records.
• Claims submission and adjudication.
• Payment processing and related claim information.
• Provider communications and operational guidance.
• Reporting and other administrative functions associated with the Public Behavioral Health System.

The specific workflow depended on the provider type, service, and applicable program requirements. Not every behavioral health claim for a Maryland Medicaid member belonged in the ASO system. Primary behavioral health services managed by an MCO, specialty behavioral health services handled through the ASO, and other fee-for-service claims can follow different billing routes.

What went wrong with the Optum Maryland claims system?

Maryland's attorney general announced a lawsuit against Optum and UnitedHealth Group on August 27, 2026. The state's complaint alleges that Optum replaced its intended claims-management software shortly before launch with an inadequately tested system developed by a subcontractor.

According to the state, the platform crashed when it went live in January 2020, and the resulting problems affected claims, payments, provider records, and oversight of potentially improper billing. The attorney general's announcement says the system was taken offline for eight months in 2020, during which Maryland officials used alternative payment estimates to keep the program operating. Read the state's allegations.

The complaint alleges that the system:

• Denied legitimate claims.
• Paid some providers incorrect amounts.
• Failed to provide reliable payment information to certain providers.
• Had difficulty distinguishing medically necessary services from potentially improper claims.
• Failed to prevent certain alleged forms of fraud.

The state says the contract was worth $126.9 million and seeks up to approximately $380 million, up to triple the contract price, under Maryland's False Claims Act. The complaint also pleads breach of contract, unjust enrichment and intentional misrepresentation.

These are allegations in an ongoing case, not a final judicial determination. Optum has denied the state's characterization of the events and argues that the dispute is fundamentally contractual. It says Maryland knew about implementation challenges and had contractual tools to address system performance. Fierce Healthcare's coverage of the lawsuit and Optum's response.

Why the history matters to providers

A system failure can create consequences beyond an individual denied claim. When provider records, authorizations, claim statuses, and payment data are incomplete or inconsistent, a practice may struggle to determine whether a service was authorized, whether a claim was adjudicated, or whether a payment discrepancy reflects a billing error or a system problem.

Maryland's later transition to Carelon introduced another operational challenge: transferring historical records and reconciling data between systems. The state has publicly acknowledged data-transfer issues during the first year of the transition, including incorrect categorization of some claims and minor payment delays. Maryland's 2026 budget decision document discusses the transition and remaining data-transfer concerns.

For providers, the practical lesson is not to assume that every legacy claim issue has a single cause. A discrepancy may relate to the original claim, the old system's adjudication, an authorization record, a transfer issue, or a later adjustment. Investigate the specific account and preserve the records needed to support your position.

What is the current status of the Optum Maryland lawsuit?

As of 5 November 2026, the latest reporting located for this article says Optum filed a motion to dismiss in October 2026. In the motion, Optum reportedly argued that Maryland's allegations turn a contract dispute into a fraud case and that the state had agreed to contractual mechanisms for handling implementation problems. Only one outlet carried the filing date, so treat it as reported rather than confirmed. Becker's Payer Issues, October 2026.

The state's position is that Optum supplied a defective system and violated state law. Optum disputes that account. The reporting reviewed for this article did not establish that the court had issued a final ruling on the motion.

What providers should take from the case: Do not treat the allegations as a finding that every Optum-era claim was incorrect, or that every overpayment demand is invalid. Equally, do not assume that an amount identified by an audit is correct simply because it appears in a state or contractor record. Review the evidence associated with each claim and follow the applicable administrative or legal process.

The lawsuit concerns Maryland's contract with Optum and UnitedHealth Group. It does not, by itself, establish that an individual provider committed misconduct or determine the validity of any particular provider's claim.

Optum Maryland vs. Carelon: what changed?

Carelon Behavioral Health became Maryland's behavioral health ASO on January 1, 2025. Maryland selected Carelon after a procurement process, with a transition period before the new contract began. Maryland Medicaid provider transmittal.

The change means providers must distinguish between the legacy Optum workflow and the current Carelon workflow.

Carelon's provider resources describe its current electronic services, including authorization requests, claim submission and status, and payment information. Carelon Behavioral Health eServices.

Do not rely on an old Optum quick reference guide for current claim submission details. The legacy guide identifies the historical Optum payer ID as OMDBH and describes its original submission and payment processes. Those instructions are useful for understanding old records, not as a substitute for current Carelon billing guidance. Optum Maryland's historical quick reference guide.

Which system should you use for a current claim?

For covered specialty behavioral health services administered through Maryland's current ASO, follow Carelon's current provider and billing instructions. Start with Maryland's official Behavioral Health Coverage guidance and Carelon's provider resources.

Do not route a claim to the legacy Optum system simply because the patient is enrolled in Maryland Medicaid or because the date of service is close to the transition date. Confirm the applicable service date, claim responsibility, provider type, and current guidance.

For claims with dates of service during Optum's contract period, or claims that were pending, adjusted, or disputed during the transition, confirm where the record currently resides and which organization is responsible for the next action.

How Maryland behavioral health practices should handle claims now

The best way to reduce avoidable claim issues is to separate eligibility, enrollment, authorization, submission, adjudication, and payment reconciliation. These steps are related, but a problem in one does not automatically establish a problem in another. The behavioral health revenue cycle guide sets out the sequence in general terms.

1. Confirm Medicaid enrollment and the correct billing route

Maryland states that behavioral health specialists must enroll through ePREP and register with Carelon to receive payment for covered specialty behavioral health services administered through the ASO. Maryland Medicaid guidance.

Before billing, confirm:

• The provider's Medicaid enrollment and status. Enrollment is not the same as credentialing or contracting, and a gap in any of the three stops payment.
• The applicable provider type and service.
• Whether the service belongs to the behavioral health ASO or the patient's MCO.
• The correct billing entity and rendering provider information.
• The applicable fee schedule and coding instructions.

Do not assume that all mental health services for a Medicaid member are billed through the same organization. Maryland distinguishes specialty behavioral health services from primary behavioral health services delivered through managed care.

2. Verify the authorization record

For services that require authorization, confirm that the authorization exists and matches the service being billed. Review the relevant provider, member, service type, units, dates, and other requirements that apply to the specific program.

If an authorization appears missing or inconsistent, do not assume that the service was never authorized, or that a denial on the claim is really an authorization denial. Check the current system, available historical records, and the relevant correspondence. Record what you checked and the outcome.

Authorization requirements vary by service. Use the current Maryland program guidance and Carelon instructions rather than relying on an old Optum training PDF.

3. Validate the claim before submission

Before sending a claim, review the elements most likely to create a rejection or payment discrepancy:

• Member identifiers and eligibility.
• Billing and rendering provider identifiers.
• Date of service.
• Procedure or service code.
• Required modifiers.
• Units and place of service.
• Authorization information, where applicable.
• Diagnosis information required for the service.
• Fee schedule and provider-specific reimbursement rules.

Use the applicable current fee schedule, provider manual, and billing companion guide. Do not copy modifiers, payer IDs, or claim-format instructions from a legacy Optum guide without confirming they remain applicable.

4. Check submission acceptance and adjudication separately

A claim being transmitted successfully does not necessarily mean that it has been accepted for adjudication or paid. Retain the relevant submission acknowledgement, clearinghouse response, claim status, remittance advice, and any correspondence.

If a claim does not appear in the current system, establish whether it was transmitted, accepted, rejected, or left pending before submitting another claim. Duplicate submissions can create another problem if the original claim is still processing.

For historical Optum-era claims, gather the available submission and adjudication evidence before requesting a reprocessing or payment review.

5. Reconcile the payment

Compare the payment or remittance record with the claim that was submitted. Check the paid amount, adjustment codes, denial reasons, units, and applicable fee schedule. Our guide to reading an EOB and ERA covers how to pull those fields apart, and the CO-16 and CO-22 explainers cover two of the codes most likely to appear on a claim routed to the wrong payer.

If a discrepancy remains, document:

• The claim identifier and date of service.
• The billed service and amount.
• The authorization record, if applicable.
• The amount expected under the applicable fee schedule.
• The actual payment or denial.
• The supporting remittance or system response.
• Previous contacts, reference numbers, and outcomes.

This creates a traceable record for follow-up and helps distinguish a coding issue from a payment or data-transfer problem.

How to investigate a legacy Optum Maryland claim

A legacy claim may require a different workflow from a current Carelon claim. The first task is to establish exactly what happened before deciding whether to correct, resubmit, appeal, or request review.

Step 1: Identify the claim's history

Collect the date of service, original submission date, claim identifier, provider information, billed amount, authorization reference, and any available status or remittance records.

Identify whether the claim was submitted through Optum, inherited from the earlier Beacon system, or handled during the Carelon transition. Do not assume that a claim's current location establishes which organization originally processed it.

Step 2: Establish the last known disposition

Determine whether the claim was:

• Never accepted for processing.
• Rejected before adjudication.
• Denied after adjudication.
• Paid at an amount that appears incorrect.
• Adjusted or reprocessed.
• Transferred but not visible in the current workflow.
• Subject to an audit or overpayment review.

Each situation calls for a different next step. A rejected claim may need correction; an adjudicated denial may require the applicable appeal or reconsideration process; a payment discrepancy may require reconciliation; and a transfer problem may require record tracing.

Step 3: Contact the responsible organization

For current ASO matters, use Carelon's current provider support and escalation process. For a legacy claim, ask which organization is responsible for the outstanding item and what documentation it needs.

Use official provider resources and keep a record of each contact. If the matter concerns a formal audit, recoupment demand, or appeal deadline, follow the instructions and deadlines in the notice rather than relying only on a general support inquiry.

Step 4: Preserve supporting documentation

Keep copies of the original claim, authorization, clinical record supporting the service, eligibility evidence, submission acknowledgements, remittance advice, corrected claims, and correspondence.

If an audit alleges that a payment was improper, compare the specific claim and service against the applicable rules and records. A system discrepancy may be relevant context, but it does not by itself prove that the claim was correct or incorrect.

Step 5: Escalate material disputes appropriately

If a material payment or recoupment issue cannot be resolved through ordinary provider support, review the formal dispute or appeal options stated in the notice and applicable program rules. Consider qualified billing, compliance, or legal advice where the amounts or deadlines warrant it.

Do not assume that the pending lawsuit automatically suspends a provider's individual deadlines or invalidates a specific recoupment. Determine the process that applies to your claim.

What if Optum-era records were transferred incorrectly?

Maryland's 2026 budget materials acknowledge problems with data transferred between Optum and Carelon during the first year of the transition, including incorrect categorization of some claims and minor payment delays. See the state's transition update discussion.

If a legacy claim appears miscategorized or missing:

1. Compare the claim information in your own records with what appears in the current system.
2. Confirm the date of service, provider identifiers, claim number, and original adjudication status.
3. Preserve the original remittance, submission acknowledgement, and any adjustment or reprocessing records.
4. Contact the current support channel and ask for the appropriate procedure for historical claim reconciliation.
5. Record the case or reference number and follow up against the stated next step.
6. If a formal notice or deadline applies, respond through that formal process even if a separate support ticket is open.

The goal is to build a documented timeline. Avoid repeatedly submitting a claim without establishing whether the original record is still active or whether the current system has a corresponding claim.

What Maryland practices should know about audits and overpayment demands

The Optum Maryland controversy includes allegations about incorrect payments and failures in the claims system. Maryland has also pursued broader reviews of behavioral health payments. That history makes careful documentation important, but it does not mean every provider should expect a recoupment or that every disputed payment is connected to a system failure.

When you receive an audit or overpayment notice:

• Read the notice carefully and identify the stated legal or program basis.
• Confirm the affected dates of service and claims.
• Request or review the claim-level calculation and supporting evidence.
• Match each claim to the service record, authorization, code, units, and applicable rate.
• Identify any differences between the notice and the records available to the practice.
• Submit the response or appeal by the stated deadline.
• Retain a complete copy of the submission and delivery confirmation.

If the notice identifies a large group of claims, ask how the sample or population was selected and how the alleged overpayment was calculated. A total amount without a clear claim-level explanation may not be sufficient for the practice to verify the finding. Extrapolation from a sample is a particular point to question: ask for the sampling method and the confidence interval before accepting an extrapolated total.

For material disputes, qualified legal or compliance support may be appropriate. The fact that Maryland has sued Optum is context, not a substitute for the provider's own evidence and response.

Maryland's CCBHC demonstration adds another operational consideration

Maryland was selected for the second round of the federal Certified Community Behavioral Health Clinic (CCBHC) demonstration. The Maryland Department of Health's current page identifies July 1, 2027, as the state's tentative demonstration start date, with certification and readiness work taking place ahead of implementation. Maryland's CCBHC program page.

The CCBHC model supports coordinated behavioral health services through a prospective payment system (PPS) and includes requirements around service delivery, care coordination, and reporting. The federal demonstration does not mean that every behavioral health practice will automatically become a CCBHC or that all services will use the same billing route.

For organizations preparing for CCBHC participation, operational readiness should include:

• Understanding the applicable certification and program requirements.
• Reviewing the CCBHC payment methodology and reporting requirements.
• Mapping how existing services and encounters will be documented.
• Confirming how claims, encounters, and payment reconciliation will work under the applicable program arrangements.
• Assigning responsibility for data quality and reporting.
• Monitoring Maryland Department of Health announcements for updated implementation instructions.

See the CCBHC glossary entry for the model's general requirements. Practices should use current Maryland guidance for the state's actual timeline and operational rules.

A practical checklist for Maryland behavioral health billing teams

Use this checklist when reviewing a current claim or investigating a legacy Optum issue.

• Confirm whether the service is handled by the ASO or the patient's MCO.
• Verify the provider's Maryland Medicaid enrollment and current Carelon registration, where applicable.
• Confirm the correct system and submission route for the date of service.
• Verify eligibility and applicable authorization requirements.
• Validate service codes, modifiers, units, provider identifiers, and fee schedule.
• Retain the submission acknowledgement and claim status.
• Compare the remittance with the submitted claim and expected reimbursement.
• For a legacy claim, establish its original and current status before resubmitting.
• Keep claim-level records and a dated log of contacts and outcomes.
• Respond to audit, appeal, and recoupment notices within the applicable deadlines.
• Monitor current Maryland Department of Health and Carelon provider communications.

Frequently asked questions

Is Optum Maryland still the behavioral health ASO?

No. Carelon Behavioral Health assumed the Maryland Public Behavioral Health System ASO role on January 1, 2025. Optum's role relates to its former contract and legacy claims or records. Providers should use current Carelon guidance for current ASO workflows.

Can I still use the Optum Maryland quick reference guide?

Use it as a historical reference for the Optum-era system, not as the default guide for current claim submission. Its payer ID, system instructions, and contact details were written for the transition into Optum in 2020. Confirm current billing requirements with Maryland Medicaid and Carelon.

Does every Maryland Medicaid behavioral health claim go through Carelon?

No. Maryland distinguishes specialty behavioral health services administered through the ASO from primary behavioral health services handled by the member's managed care organization and other claim types. Verify the correct billing route for the provider, service, and program.

What should I do if an Optum-era claim is missing from Carelon?

Gather the original claim, submission acknowledgement, authorization, remittance, and relevant correspondence. Confirm the claim's last known disposition and ask Carelon or the responsible Maryland program contact how to trace or reconcile the legacy record. Avoid duplicate submissions until you understand the claim's current status.

Does the Maryland lawsuit mean Optum claims were invalid?

No. The lawsuit alleges system failures and other wrongdoing by Optum and UnitedHealth Group, and Optum disputes the allegations. The lawsuit does not determine the validity of every individual claim or establish that a particular provider was at fault. Review each claim and any audit finding on its own evidence.

What is the status of Maryland's lawsuit against Optum?

Maryland filed suit in Baltimore City Circuit Court in August 2026. Reporting says Optum filed a motion to dismiss in October 2026. As of 5 November 2026, no ruling on that motion had been reported. Check the Maryland Attorney General's announcements and the court docket for later developments.

The bottom line

Optum Maryland's claims system is now a legacy system, but its history still matters to practices dealing with historical claims, payment discrepancies, audits, and records transferred during the transition to Carelon.

For current specialty behavioral health claims, start with Maryland Medicaid's current guidance and Carelon's provider workflows. For Optum-era claims, build a claim-level record, establish the last known disposition, and use the appropriate reconciliation, appeal, or audit process.

The lawsuit raises significant allegations about the state's former claims administration system, but it remains a disputed legal matter. Providers should focus on the records, deadlines, and rules that apply to their own claims while following current official guidance.

Related: how to read an EOB and ERA, credentialing vs. contracting vs. enrollment, and the behavioral health revenue cycle guide. Other states split behavioral health billing differently; see New Jersey's NJMMIS and North Carolina's LME-MCOs.