Government joins risk adjustment fraud case against UnitedHealth Group’s Medicare Advantage plans

LOS ANGELES, CALIFORNIA, February 22, 2017  – The US Department of Justice has joined a whistleblower lawsuit, originally filed by Phillips & Cohen against UnitedHealth Group and other defendants, that is one of the first significant whistleblower cases alleging the fraudulent use of risk adjustment data by a Medicare Advantage plan run by a major health insurer.

Phillips & Cohen is co-counsel in the case with Constantine Cannon.

The “qui tam” lawsuit, which was unsealed and made public last week, makes detailed allegations that UnitedHealth Medicare Advantage plans systematically defrauded Medicare in several ways, including retaining government payments that were inflated because of the plans’ claims that some members were sicker than they actually were.

SEE MORE: Read the Justice Department’s complaint in intervention in this case, US ex rel. Benjamin Poehling v. UnitedHealth Group, Inc., No. 16-08697.

A Medicare Advantage plan can increase its Medicare payments by using false “risk adjustment” data. UnitedHealth is the nation’s largest Medicare Advantage insurer, with more than 3.6 million members.

The whistleblower lawsuit includes allegations that UnitedHealth developed a company-wide program to review the medical charts of its Medicare Advantage members to find additional diagnoses that would boost payments from Medicare to UnitedHealth. At the same time, the lawsuit says, UnitedHealth avoided meaningfully investigating or correcting errors and high error rates that it found during those reviews because corrections would have decreased its Medicare payments.

Under the Medicare Advantage program, the government pays Medicare Advantage plans a fee to cover medical services for plan members. That fee is adjusted – i.e., a “risk adjustment” code is applied – based on each member’s health status, age and other factors that could affect the need for more or fewer medical services. Medicare Advantage plans receive more money for members with serious health conditions than they do for members who are healthy.

Phillips & Cohen filed the qui tam case in 2011 in federal district court in Buffalo, NY, and then it was transferred to federal district court in Los Angeles. The case will be litigated by the government, working with the whistleblower’s legal team.

About the False Claims Act and qui tam lawsuits

The False Claims Act encourages private citizens to file “qui tam” lawsuits against companies that are defrauding the government as a way to recover the government’s money. Whistleblowers may receive 15 percent to 25 percent of the recovered funds, if the government joins the case.

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