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Government and Whistleblowers Bring More False Claims Act Cases in 2017

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The current administration recently made it clear that it will continue to vigorously investigate and enforce the law prohibiting attempts to defraud the government.  False Claims Act (FCA) lawsuits continue to trend upwards as the Department of Justice files a second complaint against UnitedHealth Group Inc. (UHG) within two weeks.  This development follows on the heels of the prior complaint, United States ex rel. Swoben v. Secure Horizons, which outlined allegations that UHG defrauded Medicare programs with false claims for payment.

In that case, James Swoben, former SCAN Health Plan employee, accused the insurer of manipulating the Medicare Advantage Program by making patients seem like they were in poorer health than they truly were.  This relatively new Medicare provision was initially aimed at utilizing taxpayer dollars more efficiently but was unfortunately susceptible to cost the government more than necessary.  With damages in the Swoben case potentially exceeding $1 billion dollars in damages, the stakes in these FCA lawsuits have only gotten higher.

Former Finance Director for the Medicare Advantage Plans at UHG, Benjamin Poehling, brought the new lawsuit under the qui tam provision of the FCA.   This case also deals with Medicare Part C (Medicare Advantage Plans) and focuses on inflated risk adjustment payments.  The contention is the government's payments were based on UHG providing inaccurate information about the physical condition of patients enrolled in UHG plans. The spotlight is on the company's national Chart Review Program, purported to aid in the identification of latent diagnoses.  UHG allegedly avoided repaying Medicare dollars back when the program identified invalid diagnoses by ignoring the information it received.

Moreover, UHG's system promoted perverse incentives because the worse the health status of the patient, the higher the payments were from Medicare to insurers and providers.  Given this, the alleged attempt to misrepresent patient data may not be all that surprising.  UHG is alleged to have taken no steps to manage that resulting risk, even when evidence of such conduct was brought to their attention.

The move solidifies the government's staunch commitment to preserving the integrity of a key governmental program by coming after the nation's largest Medicare Advantage Organization.  U.S. Attorney Sandra R. Brown noted the abuse of the program as particularly egregious due to the intended function of the program to provide high-quality medical services to those in need.

The amount of active litigation surrounding the claims speaks to a larger issue the current administration is following closely.  The Medicare Advantage Plans were a popular alternative to the traditional Medicare model, yet still cost the taxpayers around $150 billion a year. The recent uptick in FCA cases proves the act is a powerful tool for the government to root out fraud by rewarding those who come forward with information.  This trend is likely to continue as investments in healthcare privately and publically increase.

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