Healthcare Insurers Can Sue the Federal Government

UnitedHealthcare Can Sue Over Medicare Advantage Overpayment Rule

Posted by PKSD Law Firm on April 12, 2017 in Medical Negligence

medical bill statementA U.S. District of Columbia Court ruled that UnitedHealthcare can sue the Centers for Medicare and Medicaid Services (CMS) over a 2014 ruling that made Medicare Advantage overpayments a violation of the False Claims Act.

CMS Medicare Fraud Ruling

A 2014 CMS rule under the Affordable Care Act states that private insurers participating in the Medicare Advantage program are required to report any identified overpayment or upcoding to the federal government and return the extra fees within 60 days.

Any insurer that fails to meet this deadline or neglects to return an overpayment is in violation of the False Claims Act and subject to civil lawsuits, treble damages, and other penalties.

UnitedHealthCare’s lawsuit states the CMS is holding private insurers to a higher standard than is required by the federal agency itself.

Under the Medicare Advantage program, the federal government pays private health plans monthly for each member they cover. Those payments, which are funded by taxpayers, are adjusted based on how sick a patient is.

Private insurers must make certain the coding submitted by healthcare providers that details a patient’s condition is accurate and truthful.

However, UnitedHealthcare argues that physicians are known to submit false diagnostics, known as upcoding.

Upcoding occurs when a healthcare provider bills an insurance payer for a more expensive service than was performed by sending a false Current Procedural Terminology (CPT) code to an insurance payer to increase his or her pay.

This can cause insurers participating in the Medicare Advantage program to suffer heavy penalties if one fails to identify overpayment or upcoding and report it to the federal government.

The UnitedHealthCare lawsuit alleges this rule meant insurers could be sued for negligence under the False Claims Act, which is a lower standard than the recklessness standard that is generally applied.

The lawsuit alleges that the CMS has never directly reviewed the diagnostic codes that can potentially alter the Medicare Advantage payments. It argues that error codes can be as high as 20 percent and makes private insurers highly susceptible to allegations of fraud.

Federal Judge Allows Private Insurers to Sue the Government

The federal judge ruling over the UnitedHealthcare case stated that the CMS’s policy created new obligations for insurers participating in the Medical Advantage program, which subjects it to judicial review.

The judge, however, clarified that the merits of the case are not at issue, but instead at issue is a private insurer’s right to sue the government.

The CMS enforced the 2014 ruling with the intention of curtailing Medicare fraud and upcoding, which may cost the government and taxpayers billions of dollars each year.

UnitedHealthcare Is the Subject of Two Federal Lawsuits

While private insurers retain the right to sue the government, several have come under scrutiny by the Justice Department for alleged violations of the False Claims Act.

UnitedHealthcare is currently facing two whistleblower lawsuits involving the Justice Department concerning alleged fraudulent Medicare Advantage billing.

The insurer is accused of inflating its members’ risk scores since 2006 in order to increase payments under the Medicare Advantage risk adjustment program.

In 2010, UnitedHealthcare also allegedly conspired to enhance operating income by $100 million by increasing risk-adjustment payments.

Prestige Healthcare, a Louisville, KY-based insurer, recently reached a $1 million settlement with the Justice Department over unnecessary genetic testing on nursing home patients.

The Justice Department found that from 2014 to 2015, Prestige authorized genetic testing on patients of four nursing homes in several states, including Wisconsin, without receiving physicians’ orders to administer the tests.

The federal government alleged that Prestige physicians were not aware of the tests and did not find it medically necessary to conduct them.

Victims of Fraud Have Legal Rights

Insurance providers are held to a high standard to ensure honest and ethical practices when billing patients and using federal funds.

At PKSD, our accomplished law firm is a strong advocate of consumer rights and of an honest healthcare system.

If an insurer or physician overbills a patient or takes advantage of a nursing home resident, they should be brought to justice.

Call 877-877-2228 to speak with one of our personal injury lawyers.

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