Dive Brief:
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The Justice Department has joined a lawsuit initially filed in 2009 against UnitedHealth Group by James Swoben alleging the payer intentionally overbilled CMS through the Medicare Advantage (MA) program, according to a report from Kaiser Health News and the Center for Public Integrity.
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Government lawyers have requested that the lawsuit be combined with another False Claims Act suit that was revealed in February and makes similar claims, accusing the payer of overbilling CMS by as much as billions of dollars.
- Whistleblowers in both instances say UnitedHealth willfully misrepresented patients’ health status to take advantage of a 2003 rule change that delivered higher payments to payers covering patients with certain conditions through MA.
Dive Insight:
Swoben had also filed a lawsuit against SCAN Health Plan, his former employer, around the same time he initially challenged UnitedHealth. SCAN, a managed care organization for California Medicaid plans, paid nearly $320 million to the federal government and the state of California to settle allegations it had overbilled CMS. Last August, a federal judge reversed an earlier decision by a lower court to throw out the lawsuit against UnitedHealth and others.
Involvement in the False Claims Act lawsuits against the payers indicates the Justice Department will pursue fraud as aggressively under President Donald Trump as it had under President Barack Obama. The federal government used the False Claims Act to recover more than $31 billion under President Obama compared with $13 billion under President George W. Bush.
While MA plans are generally popular among beneficiaries and lawmakers, they have accounted for substantial amounts of overbilling. A Center for Public Integrity investigation of five MA audits revealed last July that auditors were unable to confirm about a third of conditions reported by payers due to insufficient documentation. A Government Accountability Office report published in April 2016 revealed CMS overpaid MA plans more than $14 billion in 2013 alone due in large part to unsupported diagnoses.
Until recently, recoveries made through the False Claims Act in the healthcare realm mostly affected provider organizations, pharmaceutical companies, and medical device developers rather than payers. However, if ongoing investigations into payers are any indication, payers should be prepare for closer scrutiny in the future.
