- UnitedHealthcare Insurance Co. and 41 other payers are suing the Secretary of Health and Human Services in an effort to bar the Medicare Advantage final rule on overpayments.
- Under the Affordable Care Act, overpayments must be reported and repaid within 60 days of being identified.
- The complaint alleges CMS’ 2014 rule sets a different bar for assessing health claims for Medicare Advantage and fee-for-service beneficiaries, in violation of the Medicare Act.
Filed Jan. 29 in federal court in the District of Columbia, the lawsuit alleges the 2014 final rule is arbitrary and capricious because it requires companies offering Medicare Advantage plans to withdraw and repay CMS for diagnostic codes that aren’t fully supported in the patient’s record. That could cut payments to plans by 20%.
According to the suit, the insurers base their monthly capitation rates on diagnostic codes included in claim filings. The insurers say the rule violates the plain meaning of the Medicare law.
In the ACA, Congress required plans to return to CMS overpayments they have “identified — an actual knowledge standard,” the lawsuit states. “In the Final Rule, by contrast, CMS required plans to instead return any overpayment that the plan not only has identified, but also any overpayment that the plan ‘should have identified through the exercise of reasonable diligence’ — a negligence standard.”