The Justice Department has joined a whistleblower lawsuit against UnitedHealth Group filed by the insurer's former finance director, Benjamin Poehling, claiming the company overbilled the Medicare Advantage program by more than $1 billion at least.
A UnitedHealth spokesman is contesting the claim, telling the New York Times/Deal Book the insurer was just following the government program's rules on how to review patient records and correct errors.
According to the complaint, UnitedHealth's "chart review program" of its Medicare Advantage patients was, in reality, "strictly a one-sided revenue-generating program."
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"United used the results of the chart reviews to only increase government payments (i.e., submit additional codes not reported by the providers) while in bad faith systemically ignoring other information from the chart reviews which would have led to decreased payments (i.e., information about diagnoses reported by providers to United and then submitted by United to Medicare which were not supported and validated by the medical records)," the complaint reads.
UnitedHealth in 2011 had set up a quality control program as a remedy, and created a reserve with the intention of eventually returning the overbilled money to Medicare: $208 million for overpayments for 2012, and up to $180 million for 2013 and $175 million for 2014, according to the complaint.
However, executives in April, 2014 took $250 million from the reserve to partially cover a shortfall in expected revenues for that second quarter. Afterward, the quality control program was shut down and the remaining reserve balance was returned to revenues — even though the government had recently proposed a rule requiring insurers to "look both ways" when checking the accuracy of their diagnosis codes in the Medicare program, according to the complaint.
UnitedHealth spokesman Matthew Burns told the NYT the insurer was confident the company and its employees had complied with the government's Medicare Advantage program rules.
Moreover, the complaint demonstrates the Justice Department "fundamentally misunderstands, or is deliberately ignoring, how the Medicare Advantage program works," Burns says, adding that Medicare first proposed the "look both ways" rule in 2014 but withdrew it.
"Yet the Department of Justice claims the rule existed all along," he said. "This makes no sense." Questions about how UnitedHealth reviewed patients' charts and corrected errors "reflect at most a policy disagreement."
As to UnitedHealth never repaying Medicare and using some of the money in its short-lived reserve to cover a revenue shortfall, Burns told the NYT the episode was "entirely irrelevant to what this matter is actually about, and that is unclear C.M.S. policy."
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
