UnitedHealth Group filed a motion in federal court last week requesting the court dismiss a whistleblower lawsuit that claims the payer received overpayments from Medicare Advantage (MA).
UnitedHealth, which is the largest payer in the MA market, said the suit “fails properly to plead two elemental aspects of its claims: That United knowingly submitted false attestations, and that the government would have refused to pay United’s claims if it had known the truth,” according to the suit.
The payer also said that it’s not Medicare Advantage plans’ responsibility to check whether healthcare providers are providing correct information when they submit claims.
The Department of Justice (DOJ) joined two lawsuits earlier this year involving UnitedHealth and alleged MA overpayments, which totaled billions.
The health insurance industry, especially those in the MA market, are closely watching the UnitedHealth case. UnitedHealth has more than 50 Medicare Advantage and drug prescription plans so the payer is the proverbial big fish in the market. Results from this case will have ripple effects throughout the MA industry, which has enjoyed stability over the past decade.
In one of the lawsuits, former UnitedHealth executive Benjamin Poehling said the payer changed diagnosis codes to make patients seem sicker. Officials with the company also allegedly received bonuses for changing the codes. Poehling said changing codes could raise MA reimbursements by nearly $3,000 for every new diagnosis. Payers in Medicare Advantage receive a monthly risk adjustment payment for each enrolled beneficiary, which is based partly on each member’s health status.
In that lawsuit, the DOJ said UnitedHealth “knowingly disregarded information about beneficiaries’ medical conditions” and “ignored information about invalid diagnoses from healthcare providers with financial incentives to furnish such diagnoses.”
Kip Piper, an expert on Medicaid, Medicare and health reform, recently told Healthcare Dive that he expects a “long, protracted and expensive battle” involving these cases. Piper said a UnitedHealth loss could mean a multi-billion dollar payment and a corporate integrity agreement with the HHS Office of Inspector General. He added that agreement would include oversight and imposed processes to make sure it doesn't happen again.
He predicted the cases would not hurt the major payer financially because it’s “well-capitalized and in a position to cover the loss if it comes to that.” Piper also doesn't think the CMS would restrict UnitedHealth’s participation in Medicare Advantage or Part D because those restrictions would affect millions of beneficiaries.
“It will, and likely already has, resulted in greater scrutiny of United’s practices in regards to risk adjustment. But federal policies have tightened. All Medicare Advantage plans are now on guard to be extra cautious and take steps to support risk scores with data, analyses and independent verification or audits,” said Piper.
The DOJ isn’t just interested in UnitedHealth. It is also investigating other MA payers, including Aetna, Bravo Health, Cigna, Health Net and Humana.
Congress has spoken out about the overpayment issue. Sen. Charles Grassley, chairman of the Senate Judiciary Committee, sent a letter to CMS Administrator Seema Verma in April questioning what CMS is doing to “implement safeguards to reduce score fraud, waste and abuse.” HHS announced last week that it charged 400 defendants for false billing schemes totaling $1.3 billion in what it called the "largest healthcare fraud takedown in history."
Why the interest in healthcare, especially Medicare Advantage? The federal government spends billions on healthcare. With Medicare Advantage now accounting for one-third of Medicare beneficiaries, there is a lot of money in the program. Insurance companies are doing well on the market. In fact, Humana is pulling out of the Affordable Care Act exchanges to focus more on Medicare Advantage.
However, the program is open to fraud. CMS estimated that it overpaid $14.1 billion in 2013 to MA organizations. Medicare Advantage payers received about $160 billion in 2014 for approximately 16 million beneficiaries. CMS estimated about 9.5% of those payments were improper.