The U.S. Department of Justice sued UnitedHealth Group on Tuesday in a $1 billion Medicare overbilling case. It’s the second time this year that the federal government sued UnitedHealth in a whistleblower case, reported Reuters.
Former UnitedHealth executive Benjamin Poehling said UnitedHealth changed diagnosis codes to make patients seem sicker, and officials performing these deceptions collected bonuses, reported The New York Times.
- Poehling said the “data-mining projects” could raise Medicare Advantage reimbursements to UnitedHealth by nearly $3,000 for every new diagnosis.
UnitedHealth Group (UHG) is the nation’s largest Medicare Advocate provider with more than 50 Medicare Advantage and drug prescription plans. The payer receives a monthly risk adjustment payment for each enrolled beneficiary that is based partly on each person’s health status.
Poehling filed his complaint under seal in 2011 before leaving the company the following year. A 2003 rule change provided higher payments to payers who cover patients with certain conditions in Medicare Advantage. By changing diagnosis codes, UnitedHealth got a higher reimbursement from Medicare Advantage.
In announcing its lawsuit, the DOJ said UHG “knowingly disregarded information about beneficiaries’ medical conditions” and “ignored information about invalid diagnoses from healthcare providers with financial incentives to furnish such diagnoses.”
“UHG’s own reviews of these providers’ medical records confirmed that the providers were reporting invalid diagnoses. But upon obtaining such evidence, UHG knowingly avoided further efforts to identify invalid diagnoses from these providers and repay Medicare monies to which neither it nor these providers were entitled,” said DOJ.
The Department of Justice earlier this year joined a 2009 lawsuit pertaining to UnitedHealth overcharging in the Medicare Advantage program. The DOJ is also investigating Aetna, Bravo Health, Cigna, Health Net and Humana.
Congress created Medicare Advantage as a way to contain costs by having private payers offer their own Medicare programs. Medicare Advantage now accounts for about one-third of Medicare beneficiaries. Unlike the Affordable Care Act exchanges, which have seen fluctuations, payers in Medicare Advantage have been fairly stable. In fact, at least one insurer, Humana, is pulling out of the ACA exchanges to focus more on Medicare Advantage.
One major tenet of Medicare Advantage was to cut costs for the government. Expect major changes if it’s found that payers have been abusing the system and overbilling by billions of dollars.