The federal government is dropping a whistleblower lawsuit against Minnetonka-based UnitedHealth Group after a judge this month dismissed the case, but gave prosecutors a chance to amend allegations that the insurance company wrongly received higher Medicare payments.
Federal prosecutors earlier this year joined the suit, which alleged the nation's largest health insurer submitted false information about enrollee health problems to Medicare that would have significantly lowered revenue for the company had it been corrected.
The judge hearing the case referred to the government's complaint as a classic "shotgun pleading" that failed to identify the role of each named defendant. Prosecutors last week filed paperwork for dismissal.
"We are pleased with the government's decision to dismiss these meritless claims," UnitedHealthcare said in a statement.
A second whistleblower suit about Medicare "risk adjustment" payments was brought by a former Minnesota executive at UnitedHealth Group, which operates the UnitedHealthcare insurance division. Separately, UnitedHealth Group has ongoing litigation against the federal government over the risk adjustment rules.
In the dismissed lawsuit, the government alleged that UnitedHealth Group and its subsidiaries combed through medical records to find data that might boost payments from Medicare, but did not "look both ways" to correct earlier data submissions that also generated payments.
Medicare is the federal health insurance program that primarily serves Americans 65 and older. A growing share of Medicare beneficiaries opt to receive their benefits through Medicare Advantage plans sold by private insurers such as UnitedHealthcare.
In Medicare Advantage, the government pays health plans on a set per-member, per-month basis, and adjusts payments according to an individual's health risk. To obtain these risk adjustments for health status, Medicare Advantage plans submit diagnosis codes that the government uses to calculate a risk score for each beneficiary.
In general, risk scores are higher — and, therefore, generate higher payments to the insurer — when more codes are submitted, particularly for more serious conditions.
Earlier this month, UnitedHealth Group said the date of its next filing in the ongoing whistleblower suit hadn't yet been determined. In the company's case against the federal government, the insurer has said it expects to file its brief on the merits this month.