Judge allows UnitedHealth Medicare fraud case to proceed

A whistleblower case alleging that Minnetonka-based UnitedHealth Group defrauded the federal Medicare program can move forward, a federal judge ruled Monday, although the decision narrowed the set of claims that the government might pursue.

The ruling came in a case brought by a former UnitedHealth Group employee in Minnesota alleging the company submitted false information about patient conditions to collect higher payments.

It was unsealed a year ago after the federal government joined the case. They alleged that UnitedHealth Group engaged in "one-sided" reviews of patient charts, looking for ways to boost payments without correcting erroneous data that would lower reimbursement.

In an order Monday, U.S. District Judge Michael Fitzgerald dismissed claims related to Medicare payments before 2009, and he said three of six claims would be dismissed unless the government amended its filing. But Fitzgerald denied UnitedHealth Group's motion to dismiss an allegation that the company avoided an obligation to refund money to the government, as well as related claims for unjust enrichment and payment by mistake. In the order, he gave the government until Feb. 26 to amend its complaint.

"We reject the government's remaining claims and will continue to aggressively contest them," a UnitedHealth Group spokesperson said in a statement.

UnitedHealth Group is the largest publicly traded company in Minnesota. It operates UnitedHealthcare, which is the nation's largest insurer, and a health services division called Optum. UnitedHealthcare receives payments from Medicare, the federal health insurance program that primarily serves Americans 65 and older, because a growing share of Medicare beneficiaries opt to receive their benefits through Medicare Advantage plans sold by private insurers.

At issue is data Medicare uses to make "risk adjustment" payments that are intended to compensate Medicare Advantage plans for providing coverage to beneficiaries with more complicated health problems.

Monday's ruling suggested the Poehling case and the Swoben case have a similar problem by failing to allege the government would not have made the risk adjustment payments had it known of alleged problems with the underlying data.

Fitzgerald dismissed the government's claims related to risk adjustment payments before 2009, saying the government and UnitedHealth Group appeared to be in agreement about whether congressional revisions to a statute in 2009 were intended to apply retroactively.

But the judge agreed to let move forward an allegation that the company failed to delete invalid diagnoses in submissions to the government and failed to return Medicare overpayments.

Under traditional Medicare, the federal program reimburses doctors for procedures performed. Under Medicare Advantage health plans, insurers pay doctors and hospitals when enrollees use services. The government, in turn, pays the health plans a set per-member, per-month rate that's meant to cover health care costs and the insurance company's overhead.

These set rates are modified with risk adjustment payments, which take into account an individual patient's illness or underlying condition. The rules for those risk scores have been controversial in the past. UnitedHealth Group sued the federal government in January 2016 over a change in guidance on how to assess the health status of enrollees. That case has not yet concluded.