May 18, 2017

DOJ files suit against UnitedHealth over Medicare Advantage overbilling allegations

Daily Briefing

    The Department of Justice (DOJ) on Tuesday announced that it has filed a lawsuit against UnitedHealth Group alleging that the insurer improperly increased its members' risk scores so it would receive more than $1 billion in higher reimbursements from Medicare Advantage (MA).

    The move comes after DOJ joined a separate California whistleblower's lawsuit, filed in 2009, involving similar allegations.

    Details on the new lawsuit

    The new lawsuit is based on allegations made in a whistleblower lawsuit filed by Benjamin Poehling, a former finance director for UnitedHealthcare Medicare and Retirement, against UnitedHealth in 2011, which DOJ joined in February. The complaint, which names 15 companies total, was kept under seal while DOJ investigated the claims.

    Like Poehling's whistleblower suit, DOJ's complaint alleges that UnitedHealth inflated its policyholders' risk scores to boost payments the insurer receives under MA's risk adjustment program.

    The suit alleges that UnitedHealth "conducted a national Chart Review Program designed to identify additional diagnoses not reported by treating physicians that would increase [its] risk adjustment payments" and "ignored information" from the reviews that showed "hundreds of thousands of diagnoses" provided and submitted by health care providers "were invalid and did not support the Medicare payments" the insurer had requested and received. As such, DOJ said UnitedHealth "avoided repaying Medicare monies to which it was not entitled."

    In addition, the lawsuit claims that UnitedHealth accepted "invalid diagnoses from health care providers with financial incentives to furnish such diagnoses," which in turn generated inflated MA payments for UnitedHealth.

    In total, the lawsuit alleges that UnitedHealth improperly received more than $1.14 billion from MA from 2011 to 2014.

    DOJ said it is seeking triple damages from the company under the False Claims Act. Acting Assistant Attorney General Chad Readler of DOJ's Civil Division said the department's "pursuit of this matter illustrates its firm commitment to ensure the integrity of the Medicare program, including those parts of the program that rely on the services of [MA] organizations."

    UnitedHealth's reaction

    UnitedHealth said it would fight the allegations, Kaiser Health News reports.

    UnitedHealth spokesperson Matt Burns in a statement said, "We are confident our company and our employees complied with the government's [MA] program rules, and we have been transparent with CMS about our approach under its unclear policies."

    According to KHN, a CMS spokesperson declined to comment on the lawsuit (Raymond, Reuters, 5/16; DOJ release, 5/16; Haefner, Becker's Hospital Review, 5/17; Schulte, Kaiser Health News, 5/17).

    Medicare risk strategy: Opportunities for risk contracting in Medicare Advantage

    The second webconference in the Health Care Advisory Board’s two-part series on “Medicare Risk Strategy” moves beyond the Medicare ACO programs to examine opportunities for risk contracting in Medicare Advantage (MA).

    This presentation examines the hallmarks of a successful risk-based contracting strategy in Medicare Advantage and provides a framework for negotiating with private MA plans. Moreover, this presentation examines not only how to establish strong contracts upfront, but how to sustain your risk contracting strategy across the long term.

    Register for the Webconference

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