U.S. District Judge Michael Fitzgerald of Los Angeles, nominated to his position by former President Barack Obama, ruled that the U.S. Justice Department can move forward with its claims that United Healthcare retained more than $1 billion from Medicare. The lawsuit claimed the insurance provider submitted invalid data concerning the health status of patients enrolled in Medicare Advantage plans.
Medicare helps about 56 million people of which approximately 19 million have chosen to enroll in Medicare Advantage plans as an alternative to a standard plan. United Healthcare is the nation’s biggest insurer of Medicare Advantage clients, covering about 3.6 million people in 2016 alone.
Fitzgerald also ruled, however, that allegations regarding the company falsely attesting to the data’s validity was “missing.” The U.S. Justice Department had stated the insurer secured inflated risk adjustment payments based on untruthful and inaccurate client information. Fitzgerald said claims that UnitedHealth made about the health data “do not suggest they are likely to influence the payment of money.”
His decision to dismiss this portion was based on a U.S. Supreme Court decision made two years ago regarding the use of the False Claims Act. The Justice Department had said UnitedHealth violated the False Claims Act by funding medical chart reviews designed to inflate risk adjustment payments while ignoring reviews that revealed invalid diagnoses in order to avoid having to reimburse overpayments.
Back in October of last year, Judge John F. Walter, of California’s Central District, nominated to his post by President George W. Bush, also dismissed allegations filed against UnitedHealth by whistleblower James Swoben in 2009 along with claims by filed by the Justice Department in May 2017. The lawsuits alleged that the insurer ignored questionable diagnoses and falsely inflated beneficiary risk scores to boost profits from clients utilizing its Medicare Advantage plans. The October ruling barred Swoben, who had amended his complaint four times, from refiling any allegations occurring prior to March 13, 2007.
Benjamin Poehling, a whistleblower who initiated a lawsuit against UnitedHealth in 2011 after serving as the insurer’s finance director, said his former employer had instigated the “perfect scheme” to game Medicare. The risk adjustment scheme UnitedHealth came up with, Poehling explained, was designed for the sole purpose of increasing the company’s profit margin. “I came to the point where I couldn’t participate in what they were asking me to do anymore,” he said.
Whistleblowers have also claimed that UnitedHealthcare hid enrollment fraud complaints and other misconduct to boost Medicare Advantage payouts. The company has denied all of these accusations. Asked for comment, United Healthcare spokesman Matt Burns said, simply “We reject them.” Representatives say it will continue contesting the Justice Department’s outstanding allegations.
Freedom Health and Optimum HealthCare, on the other hand, were forced to pay nearly $32 million to settle a healthcare fraud lawsuit last year amid the Justice Department’s crackdown. Following this settlement, Acting Assistant Attorney General Chad A. Readler, of the Justice Department’s Civil Division, said, “Today’s result sends a clear message to the managed care industry that the United States will hold managed care plan providers responsible when they fail to provide truthful information.”