Tagged Courts

Justice Department Joins Lawsuit Alleging Massive Medicare Fraud By UnitedHealth

The Justice Department has joined a California whistleblower’s lawsuit that accuses insurance giant UnitedHealth Group of fraud in its popular Medicare Advantage health plans.

Justice officials filed legal papers to intervene in the suit, first brought by whistleblower James Swoben in 2009, on Friday in federal court in Los Angeles. On Monday, they sought a court order to combine Swoben’s case with that of another whistleblower.

Swoben has accused the insurer of “gaming” the Medicare Advantage payment system by “making patients look sicker than they are,” said his attorney, William K. Hanagami. Hanagami said the combined cases could prove to be among the “larger frauds” ever against Medicare, with damages that he speculates could top $1 billion.

UnitedHealth spokesman Matt Burns denied any wrongdoing by the company. “We are honored to serve millions of seniors through Medicare Advantage, proud of the access to quality health care we provided, and confident we complied with program rules,” he wrote in an email.

Burns also said that “litigating against Medicare Advantage plans to create new rules through the courts will not fix widely acknowledged government policy shortcomings or help Medicare Advantage members and is wrong.”

Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 18 million elderly and people with disabilities — about a third of those eligible for Medicare — at a cost to taxpayers of more than $150 billion a year.

Although the plans generally enjoy strong support in Congress, they have been the target of at least a half-dozen whistleblower lawsuits alleging patterns of overbilling and fraud. In most of the prior cases, Justice Department officials have decided not to intervene, which often limits the financial recovery by the government and also by whistleblowers, who can be awarded a portion of recovered funds. A decision to intervene means that the Justice Department is taking over investigating the case, greatly raising the stakes.

“This is a very big development and sends a strong signal that the Trump administration is very serious when it comes to fighting fraud in the health care arena,” said Patrick Burns, associate director of Taxpayers Against Fraud in Washington, a nonprofit supported by whistleblowers and their lawyers. Burns said the “winners here are going to be American taxpayers.”

Burns also contends that the cases against UnitedHealth could potentially exceed $1 billion in damages, which would place them among the top two or three whistleblower-prompted cases on record.

“This is not one company engaged in episodic bad behavior, but a lucrative business plan that appears to be national in scope,” Burns said.

On Monday, the government said it wants to consolidate the Swoben case with another whistleblower action filed in 2011 by former UnitedHealth executive Benjamin Poehling and unsealed in March by a federal judge. Poehling also has alleged that the insurer generated hundreds of millions of dollars or more in overpayments.

When Congress created the current Medicare Advantage program in 2003, it expected to pay higher rates for sicker patients than for people in good health using a formula called a risk score.

But 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 found that these improper payments have cost taxpayers tens of billions of dollars.

“If the goal of fraud is to artificially increase risk scores and you do that wholesale, that results in some rather significant dollars,” Hanagami said.

David Lipschutz, senior policy attorney for the Center for Medicare Advocacy, a nonprofit offering legal assistance and other resources for those eligible for Medicare, said his group is “deeply concerned by ongoing improper payments” to Medicare Advantage health plans.

These overpayments “undermine the finances of the overall Medicare program,” he said in an emailed statement. He said his group supports “more rigorous oversight” of payments made to the health plans.

The two whistleblower complaints allege that UnitedHealth has had a practice of asking the government to reimburse it for underpayments, but did not report claims for which it had received too much money, despite knowing some these claims had inflated risk scores.

The federal Centers for Medicare & Medicaid Services said in draft regulations issued in January 2014 that it would begin requiring that Medicare Advantage plans report any improper payment — either too much or too little.

These reviews “cannot be designed only to identify diagnoses that would trigger additional payments,” the proposal stated.

But CMS backed off the regulation’s reporting requirements in the face of opposition from the insurance industry. The agency didn’t say why it did so.

The Justice Department said in an April 2016 amicus brief in the Swoben case that the CMS decision not to move ahead with the reporting regulation “does not relieve defendants of the broad obligation to exercise due diligence in ensuring the accuracy” of claims submitted for payment.

The Justice Department concluded in the brief that the insurers “chose not to connect the dots,” even though they knew of both overpayments and underpayments. Instead, the insurers “acted in a deliberately ignorant or reckless manner in falsely certifying the accuracy, completeness and truthfulness of submitted data,” the 2016 brief states.

The Justice Department has said it also is investigating risk-score payments to other Medicare Advantage insurers, but has not said whether it plans to take action against any of them.

Categories: Cost and Quality, Courts, Health Industry, Medicare

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Viewpoints: Concern Over NIH Budget Cuts; Abortion And The Supreme Court Again Are Front And Center

A selection of opinions on health care from around the nation.

The New York Times: Why Trump’s N.I.H. Cuts Should Worry Us
Last week I was in London to participate in a scientific symposium. During coffee breaks, many British colleagues asked me and other American visitors to explain the bewildering news that President Trump had announced his intention to cut the budget for the National Institutes of Health by 18.3 percent, about $5.8 billion. (Harold Varmus, 3/22)

The New York Times: Gorsuch, Abortion And The Concept Of Personhood
Judge Neil M. Gorsuch has written little about abortion, and we do not know whether he would vote to overturn Roe v. Wade, the 1973 Supreme Court decision that established abortion as a fundamental right. But he has expressed a position on two related subjects, assisted suicide and euthanasia. In his Oxford dissertation and a later book, he defended the inviolability of human life. He rejected the role of states in granting the terminally ill a right to die and offered a legal framework that could be applied to abortion. (Corey Brettschneider, 3/21)

The Kansas City Star: Hobby Lobby Case Affirms That The Law Protects Religious Beliefs, Even Unpopular Ones
Democratic senators questioning Supreme Court nominee Neil Gorsuch appear quite preoccupied with how often he has ruled for “the little guy.” That seems an odd way to measure the independence and acuity of a judge; presumably, little guys can be wrong now and again. But in his opinion in the controversial Hobby Lobby case, Gorsuch did rule for the little guy. And in doing so, he has given us some clues about the kind of justice he would be. (Melinda Henneberger, 3/21)

Chicago Tribune: Why Tomi Lahren Will Get ‘Right’ On Abortion
Lahren, the 24-year-old conservative internet provocateur, angered many of her followers Friday when she said this during an interview on ABC’s “The View”: “I’m pro-choice and here’s why. I’m a constitutional — you know, someone that loves the Constitution. I am someone that’s for limited government. And so I can’t sit here and be a hypocrite and say I’m for limited government but I think that the government should decide what women do with their bodies. I can sit here and say that, as a Republican, and I can say, you know what, I’m for limited government, so stay out of my guns, and you can stay out of my body as well.” This did not go over well with her bosses at The Blaze, a conservative media site founded by Glenn Beck. (Eric Zorn, 3/21)

Morning Consult: Fentanyl: The Next Wave of the Opioid Crisis
We’re in the midst of a rampant opioid epidemic that has surged in three successive waves. The first involved prescription opioids. The second saw increased usage of heroin as many of those addicted to prescription opioids sought a different source of pain relief, for various reasons. The third wave has been fentanyl. The drug that killed Prince has been linked to a soaring amount of overdoses and deaths across the country. (Rep. Tim Murphy (R-Pa.), 3/21)

WBUR: In Pausing Human Research On Zika, Medical Ethicists Acknowledge A Dark Past 
This was the proposal: Deliberately infect a small group of consenting adults with the Zika virus to learn about the disease and speed up the search for a vaccine… What might go wrong and what might go right with such an experiment? Perhaps no institution can handle those questions better than the National Institutes of Health. (Paul McLean, 3/21)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.

Lawyers For OxyContin Maker Ask Judge To Dismiss Suit Filed By City Over Opioid Epidemic

Purdue Pharma argues that the lawsuit by Everett, Washington, has “multiple, independent legal failings.” In other stories on the nation’s drug crisis: the nominee for New Hampshire attorney general has defended a major opioid manufacturer; an Ohio toxicologist develops a test for carfentanil; kids call 911 when they wake up to find their overdosed parents; and the debate over needle exchanges goes on as hepatitis C spreads.

Los Angeles Times: OxyContin Drugmaker Seeks To Dismiss City’s Lawsuit
In a motion filed in federal court in Seattle, attorneys for Purdue Pharma wrote that the suit by Everett, Wash., suffered from “multiple, independent legal failings” — including statute of limitations problems and a failure to demonstrate a close connection between the company’s conduct and the criminal acts of drug dealers and addicts. (Ryan, 3/21)

Columbus Dispatch: Carfentanil Test Developed By Franklin County Toxicologist Helps In Drug Overdose Fight
No matter how hard he looked, a frustrated Dan Baker couldn’t find the answer. Knowing it could help save lives, though, he refused to give up. His tenacity was rewarded when Baker, chief toxicologist in the Franklin County coroner’s office, developed a new test to detect even minute quantities of carfentanil, a little-known, man-made opioid used to tranquilize elephants, polar bears, moose and other large animals. Baker’s test helped officials across Ohio and the country determine that the “heroin” that was causing a frightening increase in overdoses and deaths last summer was much more. (Perry, 3/22)

The Washington Post: ‘They’re Not Waking Up’: Four Children Call 911 After Their Parents’ Suspected Drug Overdose
The four children woke up and were about to start getting ready for school when they found their parents, Brian and Courtney Halye, unresponsive and cold in their bedroom. The children, ages 9 to 13, dialed 911. “My mom’s on the floor and my stepdad’s basically pale and they’re not waking up,” Courtney Halye’s daughter told an emergency dispatcher through tears. (Bever, 3/21)

Cincinnati Enquirer: Why Isn’t This Solution To The Spread Of Hep C Being Used Here?
Only one exchange site exists in Northern Kentucky, two years after a state law was changed to allow such programs, and it’s outside the population centers of Boone, Campbell and Kenton counties. In Southwest Ohio, the only needle exchange program is limping along with spotty funding and little government support. Needle exchange is lagging locally although the national Centers for Disease Control and Prevention supports such exchanges to prevent the spread of infectious diseases, including hepatitis B and C and HIV. (DeMio, 3/21)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.