After unveiling its intent to intervene in a five-year-old qui tam lawsuit filed by a former UnitedHealth Group employee alleging practices of diagnosis “upcoding,” the Dept. of Justice (DOJ) this week said it would join another lawsuit claiming that UnitedHealth and other Medicare Advantage insurers fraudulently collected payments by exaggerating risk adjustment claims. And with the recent disclosure that the DOJ is looking into the risk adjustment practices of four other MA plan sponsors named in the original complaint, the pressure on MA plans to self-check their own risk adjustment practices is growing.

In a March 24 court filing, federal prosecutors indicated that they will intervene in allegations against UnitedHealth contained in a whistleblower suit originally filed in 2009 by former SCAN Health Plan employee James Swoben. That case resurfaced in an appeals court last September, and alleged that MA insurers such as Aetna Inc., UnitedHealth and WellPoint, Inc. inflated risk scores to receive higher reimbursements (MAN 9/1/16, p. 8). SCAN had already removed itself from the suit by paying a $322 million settlement. The fourth amended complaint (U.S. ex rel. James M. Swoben v. Secure Horizons) charges that the defendants conducted retrospective reviews of patient records in order to identify additional diagnosis codes that would lead to enhanced payments but did not use the reviews to withdraw or report previously submitted codes that were not supported.

The DOJ in February also said it planned to intervene in the allegations against UnitedHealth and its WellMed subsidiary contained in U.S. ex rel. Benjamin Poehling v. UnitedHealth Group, Inc. et al., which was filed by former UnitedHealth employee Benjamin Poehling on Oct. 27, 2011, and sealed until February. That suit names United/WellMed, 12 other MA plan sponsors and a health care technology firm. By submitting exaggerated or “upcoded” risk adjustment claims, the defendants fraudulently collected and kept “hundreds of millions — and likely billions — of dollars” in MA payments, alleges the suit (MAN 3/2/17, p. 3). The complaint also charges that UnitedHealth and others failed to fix previously submitted Medicare risk adjustment claims even when they knew, or should have known, that such claims were false, and that UnitedHealth incentivized the elevation of risk scores. The Justice Dept. requested a hearing to consolidate the cases.

UnitedHealth has said it rejects and plans to protest the claims in the original suit, and in a statement provided by company spokesperson Matt Burns regarding the new case, it asserted, “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. 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.”

Meanwhile, the DOJ in a March 14 filing said it “has been conducting, and continues to conduct, on-going investigations of” four other defendants: Aetna, Inc., Cigna Corp. subsidiary Bravo Health, Inc., Health Net, Inc. and Humana Inc. Until those investigations are completed, the federal government said it cannot reach a decision about the insurers’ liability under the False Claims Act as to the “truthfulness of their claims to the Medicare Program for risk adjustment payments, the truthfulness of their risk adjustment attestations to the Medicare Program, or their possible improper avoidance of returning overpayments.” The DOJ added that it will file its complaint against UnitedHealth and WellMed by May 16.

DOJ Is Investigating Four Other Firms

Centene Corp., which acquired Health Net in March 2016, disclosed its participation in the investigation in its annual report filed Feb. 21 with the U.S. Securities and Exchange Commission.

According to that document, Centene in December 2016 received a Civil Investigative Demand from the DOJ regarding Health Net’s submission of risk adjustment claims under Parts C and D that it believed to be related to the whistleblower suit. “The Company is complying with the CID and will vigorously defend any lawsuits,” stated the filing. “At this point, it is not possible to determine what level of liability, if any, the Company may face as a result of this matter.”

And in an emailed statement from Humana, the insurer said it “has robust risk adjustment policies and procedures, routinely performs self-audits to improve accuracy and investigates allegations of fraud or misconduct related to risk adjustment.” It continued, “We are confident in our risk adjustment practices and our compliance program around them, and we will continue to cooperate with the investigation.”

Aetna, meanwhile, reminds AIS Health that it does not “comment on pending litigation.” Cigna did not reply to a request for comment.

In a March 20 blog post, health care attorney Steven Chananie warned that the DOJ’s involvement in the first lawsuit, combined with other enforcement actions, can only mean that more lawsuits and enforcement will follow and that plans in the meantime should make sure their risk adjustment practices under the current system are up to code.

“The urgency for [MA plans] to proactively and immediately conduct a comprehensive review of their overall approach to the HCC-RAF [Heirarchical Condition Categories and Risk Adjustment Factor] risk adjustment process has been underscored by the government’s announcement,” suggested Chananie, a partner in the Corporate Practice Group in the New York office of the law firm Sheppard, Mullin, Richter & Hampton LLP. “Keep tuned for further developments against the other defendants and against other possible targets. In the meantime, it is certainly prudent for [MA plans] to consider an internal review that includes a careful examination not only of auditing protocols, but also of all relevant operational issues ranging from how relationships with providers and vendors are being handled and overseen to how incentive compensation is structured for employees, vendors and providers.”