The Justice Department has accused insurance giant UnitedHealth Group of overcharging the federal government by more than $1 billion through its Medicare Advantage plans.
In a 79-page lawsuit filed late Tuesday in Los Angeles, the Justice Department alleged that the insurer made patients appear sicker than they actually were in order to collect higher Medicare payments than the company deserved. The government said it had “conservatively estimated” that the company “knowingly and improperly avoided repaying Medicare” for more than a billion dollars over the course of the alleged decade-long scheme.
“To ensure that the program remains viable for all beneficiaries, the Justice Department remains tireless in its pursuit of Medicare fraud perpetrated by health care providers and insurers,” said acting U.S. Attorney Sandra R. Brown for the Central District of California, in a statement announcing the suit. “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 denied the allegations.
Tuesday’s filing marks the second time that the Justice Department has intervened to support a whistleblower suing UnitedHealth under the federal False Claims Act. Earlier this month, the government joined a similar case brought by California whistleblower James Swoben in 2009. Swoben, a medical data consultant, also alleges that UnitedHealth overbilled Medicare.
The case that the feds effectively joined on Tuesday was first filed in 2011 by Benjamin Poehling, a former finance director for the UnitedHealth division that oversees Medicare Advantage Plans. Under the False Claims Act, private parties can sue on behalf of the federal government and receive a share of any money recovered.
UnitedHealth is the nation’s biggest operator of Medicare Advantage plans, covering about 3.6 million patients in 2016, when Medicare paid the company $56 billion, according to the complaint.
Medicare Advantage plans are private insurance plans offered as an alternative to Medicare’s traditional fee-for-service option.
Medicare pays the private health plans using a complex formula called a risk score, which is supposed to pay higher rates for sicker patients than for those in good health. But waste and overspending tied to inflated risk scores has repeatedly been cited by government auditors, including the Government Accountability Office. A series of articles published in 2014 by the Center for Public Integrity concluded that improper payments linked to jacked-up risk scores have cost taxpayers tens of billions of dollars.