Department of Justice Intervenes in Fraud Cases Against UnitedHealth

June 12th, 2017

With all of the news surrounding the fate of the Affordable Care Act lately, you may have missed that the government intervened in two lawsuits alleging fraud against the country’s largest health insurance company, Minnetonka-based UnitedHealth Group. Since the beginning of this year, the Department of Justice joined two separate False Claims Act cases against UnitedHealth. Both qui tam lawsuits (the Latin phrase commonly used for False Claims Act cases brought by a whistleblower) allege that UnitedHealth fraudulently inflated its Medicare Advantage risk adjustment scores.

So, what is the Medicare Advantage program? What are risk adjustment scores? And how can a major health insurance company, like UnitedHealth, defraud the government? The answers to each of these questions can be found in this post.

The Medicare Advantage program provides Medicare beneficiaries with the option to receive their Medicare benefits through private health plans as an alternative to the traditional Medicare program. When a beneficiary enrolls in a Medicare Advantage plan, Medicare pays the private health insurer a fixed per-enrollee amount each month to provide benefits to the beneficiary. In 2016, 17.6 million people received their health insurance through the Medicare Advantage program. Minnesota is the state with the highest percentage (55%) of Medicare beneficiaries enrolled in Medicare Advantage.

Because Medicare insures adults at age 65 and older and people with disabilities, Medicare inherently covers among those with the highest risk of chronic (and most costly) health conditions. In an effort to motivate private health insurers to cover Medicare beneficiaries, a “risk adjustment score” was added to Medicare Advantage reimbursements. This new factor takes into account a beneficiary’s prior diagnoses from one year to calculate a risk adjustment payment for the following year. This risk adjustment score estimates the cost to insure the beneficiary for the year. Generally speaking, the more illnesses or severe health problems a beneficiary has, the higher the risk adjustment score, which means a higher reimbursement from the government. In other words, the sicker a beneficiary seems to be, the more money the private insurer is reimbursed for coverage.

Along with the incentive to cover Medicare Advantage beneficiaries comes great opportunity for fraud. One way health insurers can defraud the government, as alleged in the UnitedHealth Group cases, is by “upcoding” a beneficiary’s medical diagnoses. Upcoding is the term used when an insurer exaggerates a beneficiary’s medical condition in order to game a larger reimbursement from the government. It has been estimated that upcoding has generated billions of dollars in excess public spending each year. If the government finds that UnitedHealth engaged in upcoding in order to receive higher reimbursements, then UnitedHealth may be liable to pay back up to three times the amount the government was defrauded.

If you are a Medicare recipient or are connected with others receiving Medicare, it makes sense to be watchful of your documentation to be sure everything is accurate. Eliminating fraud is one way to increase resources available for legitimate healthcare needs and to prevent abuse of taxpayer’s contributions to the public good.

Halunen Law attorneys represent whistleblowers (also known as relators) in False Claims Act/qui tam lawsuits throughout the United States, including healthcare fraud, fraudulent billing to Medicare and Medicaid, pharmaceutical fraud, medical-device fraud, small-business fraud, and Department of Defense fraud.

United States of America, ex rel James M. Swoben v. Secure Horizons et al., Case No. CV09-5013 JFW (C.D. Cal.)
United States of America, ex rel Benjamin Poehling v. UnitedHealth Group, Inc. et al., Case No. 11-cv-0258-A (W.D.N.Y.)


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