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Behind the Gates: How UMR Takes Over Utilization Management In Our Health Plan — and Why the AI & 'Clean Claim' Clauses Should Sound Alarms

We've read the fine print. And we're right. The contract says: ”Emblem will utilize UMR systems and follow UMR protocols for the provision of UM services.” We unpack what it means for denials & claims

Educators of NYC Oct 2

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Meet United Medical Resources (UMR). They’re not a household name, but under the new NYCEPPO plan, UMR will become the central authority deciding what care you can and cannot get. Acting as the Third Party Administrator for UnitedHealthcare and Emblem, UMR will be the interface every member has to go through for nearly all preauthorizations, claims, and medical approvals.

It’s important to know:

• UMR does not provide insurance directly. Instead, it handles claims processing, prior authorizations, appeals, and network administration for self-funded employer health plans.

• In practice, that means when an employer (like the City of New York) self-funds a health plan, UMR manages the day-to-day administration — paying providers, processing denials, running utilization management, and enforcing prior authorization rules.

• Because UMR is a subsidiary of UnitedHealthcare, its systems, networks, and policies are closely tied to UHC’s

In other words, they’ll be the gatekeepers. And, you and your family will know them very soon if, and when we are switched over.

The Bait and Switch

The UFT’s FAQ and paid political operatives tried to downplay United Healthcare’s notorious track record with its 1 out of 3 denials of claims.

The Wire warned about this ‘bait and switch’ tactic last week:

Union leadership and the city’s negotiating committee are distributing FAQs to calm legitimate concerns about the role UnitedHealthcare (UHC) will have in this plan given its well-documented record of claim denials.

The UFT’s FAQ in particular craftily tells members not to worry:

• “EmblemHealth will do all prior authorizations in the Downstate 13 counties in New York State, which represents 90% of claims.”

• “UnitedHealthcare, which will process the remaining 10% of claims, will follow the exact same standards that EmblemHealth adheres to, ensuring that prior authorizations are handled uniformly nationwide.”

This framing makes it sound like most members are protected from UHC—and only a small fraction of claims (10%) will ever touch them.

The Wire accurately foretold:

But this is deeply misleading.

• Thousands of retirees and their families live outside the Downstate 13. For them, UnitedHealthcare will be their direct administrator and gatekeeper—not Emblem.

• Some active members and other city workers also live and work outside these counties—they too will fall under UHC administration.

• According to the lead consultant pushing this plan, even inside the Downstate 13, the standards remain UHC’s standards. Emblem may process the paperwork, but the rules—the criteria, or standards, that decide whether your care is approved or denied—are Some active members and other city workers also live and work outside these counties—they too will fall under UHC administration.

This means the entire system, for every member, retiree, and family, is governed by UHC’s standards.

We Were Right. It’s In The Redacted Contract.

Now that the UFT and MLC have voted to approve the NYCEPPO self-funded healthcare plan administered by UnitedHealthcare and Emblem, that will affect more than 750,000 active employees, pre-Medicare retirees, and their dependents, the City has finally released the redacted administrative services contract.

When the draft contract first appeared, it looked like routine legalese — pages of clauses on claims, appeals, and provider networks. But we’re doing the work to analyze it.

Hidden in the details is a major shift: United Medical Resources (UMR) will take over nearly all control of utilization management, moving from a shared role to one of near-total authority. On top of that, the contract allows the use of artificial intelligence to decide claims, with almost no protections in place. It also sets up a major roadblock with its “clean claim” clause.

Educators of NYC‘s The Wire was among the first to uncover these risks in the plan. Our articles laid out how the deal hands UHC/UMR sweeping power over prior authorizations and warned of the dangers of AI-driven denials without proper oversight.

All those who said we need to read the fine print BEFORE approving this deal: Yes, you were right, too!

The devil is in these details.

What the contract actually says: UMR as the master of Utilization Management

The contract is clear as day: UMR takes over as the primary authority for utilization management. Across multiple sections, the language makes clear that Emblem’s role is secondary, limited, or entirely absent.

Here are the critical references that can be found in its Exhibit A, Schedule of Medical Benefits Schedule section:

• On page 8, the contract strips Emblem of a central function: “Emblem will not perform any Claims Adjudication services; all Claims Adjudication will be conducted by UMR”

  This is big! Claims adjudication is the long and complex process that is used by a payor to evaluate medical claims. UHC/AMR’s standards and processes will determine how much will be reimbursed to a healthcare provider for administering care services.

• On page 11, it continues: “For the purpose of any post-service Claims appeals, UMR shall be the primary point of contact and interface with providers and Participants, and shall provide systems access, data, letter fulfillment and related support.”

• On page 10, the contract states that “UMR will handle all utilization management (UM) including prior authorization pre-determination, pre-service appeals and peer-to-peer review, for all services outside of the Downstate Counties.”

  Yes, as predicted. Out of state retirees will be at the mercy of the UHC “deny and delay” machine. This is the trade off those who wanted to see the out of state network for retirees expand. Seems like a dangerous proposition.

• Pages 10 and 11 tell us: While Emblem will handle the front-facing utilization management (UM) in the the Downstate 13, ”Emblem will utilize UMR systems and follow UMR protocols for the provision of UM services.” (That’s the smoking gun!)

  And even within the Downstate region, UMR assumes full control for advanced imaging, genetic testing, physical therapy, occupational therapy, speech therapy, and behavioral health/substance abuse — “regardless of geography”. UHC/UMR will handle all of our mental health provider claims — throughout. All of them.
  

• The top page 8 says, Emblem will be accessing UHC/UMR phone system and dashboard and when it handles your calls and inquiries. The contract reads, “Emblem staff will answer member calls using UMR’s telephony system. Phone number will be the current NYC member number. Emblem will access the United Advocacy Tool (UMR’s Plan Advisor Dashboard) to manage calls.”
  

• UMR becomes the gatekeeper for provider grievances and dispute: “UMR shall be the primary point of contact and interface with providers for intake of all provider disputes.” (page 13)
  

• The same designation applies to member grievances: “UMR will serve as the primary point of contact and interface with providers and Participants for all grievances and complaints.” (page 12)
  

• And finally, on pages 13 and 14, UMR is written in as the sole arbiter of out-of-network claims and No Surprises Act negotiations: “UMR will be responsible for administering the OON programs…” “UMR will handle all ‘No Surprise Act’ negotiations with out-of-network providers… including any associated appeals.”
  

Taken together, these provisions leave little doubt: UnitedHealthcare’s UMR is not just some subcontractor. It is written into the plan as the central and controlling authority for utilization management, claims determinations, and appeals. It’s the ultimate gatekeeper.

The AI clause: minimal guardrails, maximum danger

Beyond the centralized regulatory regime, the contract carves out explicit permission for algorithmic or AI-based decisioning in claims, with weak constraints:

“Co-Administrators shall ensure that any use of artificial intelligence, algorithms or other software complies with applicable Law, including that Claims be consistently decided and that all clinical support tools are based on sound and generally acceptable logic and rules.”

(Exhibit A — Section 6: Claim Determinations and Appeals)

Yes, sometimes it’s not about what is said but what is omitted. That’s the only direct mention of AI.

Absent are provisions that:

• Require human override or review, especially in adverse decisions

• Mandate audits and transparency (e.g., access to the decision logic)

• Impose bias mitigation standards (e.g., equity testing)

• Limit the scope of AI (e.g., only for low-value claims)

• Provide notice to participants that algorithms were used in their case

In effect, the contract legalizes a “black box” approach: UMR (or its agents) could use machine decisioning to deny claims, and the burden falls on patients/providers to challenge with limited visibility.

This is precisely what our “AI Denials in the Newly Proposed Plan” Substack article warned: “there is effectively no requirement for human review unless otherwise carved out … the plan embraces AI decisioning with only vague legal compliance safeguards, which is insufficient to protect members.”

Why this matters — what’s at stake

This isn’t just about tedious paperwork. These provisions directly affect how quickly and fairly people can get care, even for life and death situations. We should expect:

• Hard to challenge decisions: With UMR in charge of approvals, denials, and appeals, there’s little outside oversight. When AI tools are added, it makes the process even more of a black box.

• Delays and denials will grow: Algorithms can automatically reject claims or kick them into appeals. That means patients and providers face more red tape and wait longer for care.

• Bias in the system: Without strong safeguards, AI systems can reinforce inequities, leaving some groups with fewer approvals or access to treatment.

• Local providers sidelined: Doctors, clinics, and care managers could see their recommendations overturned by UMR’s national, AI-driven standards.

• Appeals with no independence: Even when members appeal, they’re appealing back to UMR — the same company that denied them in the first place. That’s not a fair system.

What we need to fight for, now

If this contract is going to move forward and finalized, members and delegates must demand protections that put people first:

1. Full transparency — Release all versions of the contract, including the redacted sections, so the public can see exactly what UMR is empowered to do.

2. Stronger AI safeguards — Require human review of denials, full audit trails, transparency around how decisions are made, and checks for bias.

3. Limits on UMR’s authority — Keep critical areas like behavioral health and high-cost care from being fully controlled by UMR.

4. Independent appeals — Appeals should be reviewed by an outside body, not the same administrator that denied the claim.

5. Public accountability — Mandate regularly publicly accessible reports on denial rates, overturned appeals, and the fairness of AI tools.

6. Education and mobilization — Share the actual contract excerpts, charts, and our delegates and members know exactly what’s at stake before any vote.

The Contract’s “Clean Claim” Roadblock

In the contract, UMR makes clear in several places that only “clean claims”— claims submitted without any errors, missing fields, or coding issues — are eligible for payment.

As the language states: “ …Only Clean Claims will be considered for payment.”

On paper, this sounds like simple efficiency. In reality, it gives UMR a powerful tool: if a claim isn’t perfectly formatted, they can delay, pend, or deny it until the provider resubmits. That shifts the burden back to doctors and hospitals, creating red tape and delays for patients waiting on care or reimbursement.

The concern is that this strict standard becomes a built-in loophole. Even minor errors — a wrong code, a missing authorization, or a typo — can block timely payment. Combined with the contract’s allowance for AI-driven claim reviews, the definition of “clean” could be applied more aggressively, with algorithms automatically rejecting claims before a human ever looks at them.

In practice, UMR’s focus on “clean claims” is less about efficiency and more about cost control and leverage. It gives the administrator an easy way to slow down spending while putting extra strain on providers and members, who are left navigating denials and resubmissions.

The Bottom Line

This contract hands UMR the keys to our healthcare system — not just to process claims, but to decide who gets care and who doesn’t. The AI clause, vague and weak as it is, could let algorithms quietly control life-changing decisions. The “clean claims” clause is designed to throw a monkey wrench into the claims process.

In the NYCPPOE contract, UMR would become a primary authority for NYC employee and retiree health plan claims and preauthorizations. That places UnitedHealthcare’s administrative arm in control of what care gets approved or denied. And we know that everything behind the UHC machine is about denying and delaying to contain costs and drive their profits.

We must continue to organize. Now.

The question is whether union members and taxpayers will act on this knowledge before it’s too late.

Read the NYCEPPO redacted contract

Exhibit A: Schedule of Medical Benefits

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