As part of a False Claims Act lawsuit filed against UnitedHealth Group in 2011, the federal government revealed it is also investigating Aetna, Bravo Health, Cigna,, Health Net and Humana, Reuters reported.
The Justice Department announced last month that it would join the lawsuit brought against UnitedHealth by Benjamin Poehling, a former finance manager for UnitedHealthcare Medicare and Retirement, the New York Times reported.
- Poehling claimed UnitedHealth misrepresented health status of beneficiaries with Medicare Advantage (MA) plans in order to receive higher reimbursement rates.
Accusations suggest payers knowingly overbilled CMS by hundreds of million of dollars, if not billions, over several years. This was accomplished through a scheme to manipulate claims data in order to secure higher payments from CMS through risk adjustment, according to documents filed with a federal court in 2011.
In 2003, CMS introduced a risk adjustment factor in reimbursement models for MA plans. The change delivered about $3,000 per year to payers for each qualifying condition diagnosed in each beneficiary they covered, according to the lawsuit. Payers had previously received a flat rate per beneficiary per month regardless of health status.
After implementation of risk adjustment, payers supposedly began to submit claims for conditions that patients did not have or for which they were not treated. UnitedHealth allegedly offered financial bonuses to employees and payments to physicians through programs designed specifically to increase the number of risk adjusted claims it submitted to CMS. In an email discussing risk adjustments, a UnitedHealth executive wrote, “I’d like to see what it would take to add another $100 million to our 2008 revenue from where we are.”
The federal government had not really used the False Claims Act as a vehicle to pursue fraud until recently. The government recovered $13.97 billion through the False Claims Act under President George W. Bush, according to a report from the National Law Review. That number more than doubled under President Barack Obama, skyrocketing to $31.3 billion.
A majority of money recovered through the False Claims Act comes from the healthcare industry. More than $4.3 billion was recovered in fiscal year 2016 and $2.5 billion came from healthcare, according to the Department of Justice. Provider organizations, pharmaceutical companies, and medical device developers rather than payers were responsible for a wide majority of recoveries made in 2016.