DOJ Alleges UnitedHealth Received More Than $1B for False Medicare Claims

Following a whistleblower’s assertion that UnitedHealth Group was inflating Medicare diagnoses in order to get more money from the Medicare program, the US Department of Justice (DOJ) has filed a lawsuit against the company.

The lawsuit alleges that UnitedHealth knowingly inflated risk adjustment payments by submitting inaccurate information about beneficiaries enrolled in Medicare Advantage plans, and follows a related action from just 2 weeks ago that alleged UnitedHealth submitted false claims to the Medicare program.

“To ensure that the program remains viable for all beneficiaries, the Justice Department remains tireless in its pursuit of Medicare fraud perpetrated by healthcare providers and insurers,” Acting US Attorney Sandra R. Brown for the Central District of California said in a statement. “The primary goal of publicly funded healthcare programs like Medicare is to provide high-quality medical services to those in need—not to line the pockets of participants willing to abuse the system.”

UnitedHealth is the largest Medicare Advantage organization and provides services and prescription drug benefits to millions of beneficiaries. In 2016, it covered about 3.6 million patients. The company is reimbursed through risk adjustment payments that are based significantly, although not wholly, on the health status of the beneficiary. As the lawsuit explains, the more conditions a beneficiary has and the more severe the conditions are, the higher the risk score, which results in larger payments made to the organization.

“This payment model creates powerful incentives for MA Organizations to over-report diagnosis codes in order to exaggerate the expected healthcare costs for their enrollees,” the DOJ wrote in the filed lawsuit. The government requires diagnoses be supported and validated by the medical record. The lawsuit alleges that United increased the amount of money it received by reviewing medical records from providers and employing diagnosis coders to review them and add diagnosis codes that the providers did not report.

The lawsuit also contends that UnitedHealth also entered agreements with some fee-for-service providers, providing them with incentive payments based on revenues that the company received from Medicare, thus incentivizing these providers to increase the number of diagnoses they recorded.

The lawsuit estimates that through these practices, UnitedHealth received at least $1 billion in payments that it was not entitled to.

“As the nation’s largest Medicare Advantage Organization, UHG received substantial overpayments based upon untruthful and inaccurate information about the health status of those enrolled in its plans,” said Acting US Attorney James P. Kennedy Jr for the Western District of New York. “Such fraudulent spending of taxpayer’s dollars will not be tolerated.”