Feds join second whistleblower case against UnitedHealth Group

The federal government has joined a second whistleblower lawsuit alleging that Minnetonka-based UnitedHealth Group wrongly received higher payments from Medicare based on false information about enrollee health problems that could have been corrected.

In a filing this month, federal prosecutors said they want to consolidate the second case with a whistleblower lawsuit unsealed in February that alleged UnitedHealth and customers of its subsidiary for data and analytics received hundreds of millions, if not billions, of dollars in government overpayments related to "risk adjustment."

Like in the earlier case, UnitedHealth on Tuesday issued a statement saying the company was confident it complied with Medicare rules.

The federal government disclosed this month it has ongoing investigations about risk adjustment practices at four other carriers including Aetna and a division of Cigna.

"Litigating against Medicare Advantage plans to create new rules through the courts will not fix widely-acknowledged government policy shortcomings or help Medicare Advantage members," UnitedHealth Group said in its statement.

UnitedHealth Group is the parent company of UnitedHealthcare, which is the nation's largest health insurer. The company is the nation's largest provider of Medicare Advantage (MA) health insurance plans, where the government provides insurers with a per-member per-month payment for managing the health care of enrollees. Medicare will increase these "capitation" payments for patients who have a greater risk of needing costly treatments.

The new lawsuit says UnitedHealthcare and related companies submitted information to Medicare about patient diagnoses to justify payments, and then later performed record reviews to find more diagnosis codes that could justify further payments. These retrospective reviews have a legitimate purpose in improving the accuracy of risk adjustment information, the lawsuit says, but alleges UnitedHealthcare didn't use these reviews to correct errors in the information originally provided to Medicare.

The lawsuit says the defendants' "certifications were knowingly false and fraudulent because UnitedHealthcare and [related companies] knew that the retrospective review results submitted to [the federal government] were faulty and deficient."

In its statement, UnitedHealth Group said: "We are honored to serve millions of seniors through Medicare Advantage, proud of the access to quality health care we provided, and confident we complied with program rules."

UnitedHealthcare is the nation's largest operator of Medicare Advantage plans, with about 4.6 million enrollees as of February 2017, according to a report this month from Mark Farrah Associates. The consulting firm's report said UnitedHealthcare saw growth in MA enrollment of nearly 22 percent year-over-year.

Back in 2013, federal prosecutors opted to not join the second whistleblower's lawsuit, which was originally filed under seal in 2009. Filed by California resident James Swoben on behalf of the federal government, the lawsuit initially targeted a different health insurer and was subsequently amended to include others, said William Hanagami, the whistleblower's attorney.

In 2014, a federal court in California dismissed Swoben's case, which prompted an appeal to the Ninth Circuit Court of Appeals. During the appeal, the U.S. Department of Justice filed an amicus brief in support of Swoben, noting that nearly one-third of all Medicare beneficiaries are enrolled in MA health plans.

The court of appeals sided with Swoben and sent the case back to the trial court, Hanagami said. Prosecutors have asked for a hearing on whether the Swoben case can be consolidated with the whistleblower case unsealed in February from Benjamin Poehling, a former director of finance at UnitedHealth Group who worked in Minnesota.

Poehling's lawsuit also makes allegations regarding risk adjustment payments for enrollees in MA plans.

Medicare Advantage health plans make payments to doctors and hospitals when enrollees use services. The government, in turn, pays the health plans a capitation payment that's meant to cover health care costs plus the insurance company's overhead.

Rules for how payments should be risk adjusted for patient illnesses have been controversial in the past, with UnitedHealthcare suing the federal government in January 2016 over a change in guidance on how to assess the health status of enrollees.

Federal auditors have reported in the past on the potential for errors with payments to Medicare Advantage plans, with a study estimating $11.8 billion in improper payments during fiscal 2013.

Christopher Snowbeck • 612-673-4744