|May 31, 2017
||Managed Care Providers' Billing Practices Focus of False Claims Act Lawsuit
By Jennifer Girod, John Ketcham and Andrew Sylora, Plews Shadley Racher & Braun LLP
Recent intervention by the U.S. Department of
Justice (DOJ) into a whistleblower lawsuit filed by a relator on behalf of the
United States against UnitedHealth Group Inc. (UHG) demonstrates the government
is taking a more active role in combating healthcare fraud and billing
practices, particularly involving managed care providers.
The suit, filed by UHG’s former finance director
under the False Claims Act (FCA), alleges that since at least 2006, UHG
obtained inflated payments for its Medicare Advantage patients by manipulating
clinical data to cause the Centers for Medicare and Medicaid Services (CMS) to
pay a higher monthly amount for members’ care.
The suit also alleges UHG retained overpayments related to inflated risk
adjustment payments that it “knowingly” failed to correct. The suit alleges
that UHG overcharged the government “hundreds of millions—and likely
An FCA violation occurs when a claimant “knowingly”
submits a false or fraudulent claim for money or property to the government. “Knowingly”
includes “reckless disregard” or “deliberate ignorance” of the truth. FCA
violations may also occur when a claimant conceals or avoids an obligation to
pay money or property to the government. The complaint was filed under FCA’s qui
tam provision, which allows private citizens (known as “whistleblowers”) to
file complaints on behalf of the government against those suspected of
defrauding federal programs.
The FCA imposes significant financial penalties for
defrauding federal government programs. Individuals or companies who violate
the FCA are liable for up to three times the government’s actual financial
losses and a mandatory civil penalty of up to nearly $ 22,000 for each false
claim. A relator is entitled to between
15 and 30 percent of moneys recovered.
On May 16, 2017, the DOJ intervened in the relator’s
FCA case (U.S. ex rel. Benjamin Poehling v. UnitedHealth Group Inc. et al.,
C.D. Cal., No. 16-cv-8697). While other managed care providers were also sued,
the DOJ pursued only the claims against UHG.
intervention in this complaint comes in the wake of several other FCA
whistleblower claims involving managed care providers. The government appears
to be adopting a more aggressive stance towards potentially fraudulent billing
by managed care providers.
care providers should carefully assess any program or algorithm being used with
diagnosis codes to ensure that claims are not purposefully or inadvertently
care providers must repay any identified overpayments within 60 days.
care providers should not provide bonuses to employees or contractors tied to
or based on increasing reimbursement from federal healthcare programs, which
could appear to be illegal kickbacks to potential relators and/or government
expressly certified to the government in an annual attestation that the risk
adjustment information submitted was “accurate, complete and truthful.” Recent
U.S. Supreme Court rulings have noted submission of such information, even
without an explicit attestation, may imply a certification of compliance with
all applicable laws, and thus any errors or inaccuracies found after submission
could be grounds for FCA liability.
care practice group at Plews Shadley Racher & Braun LLP will continue to
monitor developments and regularly works with physicians, dentists, nurses,
physician assistants, and other health care providers to counsel on FCA and
other regulatory issues. Additional
information about Plews Shadley Racher & Braun LLP and its health care
practice is available at www.psrb.com.
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