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DOJ joins whistleblower lawsuit against UnitedHealth Group, WellMed

Civil lawsuit alleges insurer overcharged Medicare hundreds of millions by claiming its members were sicker than they were.

Susan Morse, Managing Editor

The Department of Justice has joined a whistleblower lawsuit against UnitedHealth Group and subsidiary WellMed Medical Management, claiming the insurer allegedly defrauded Medicare of hundreds of millions in risk adjustment payments.

UnitedHealth Group is accused of improperly inflating risk scores for Medicare Part C managed care and Part D prescription drug payments by claiming its members were treated for conditions they either did not have or were not treated for, according to the lawsuit.

The suit was originally brought in 2011 by a whistleblower through attorney Constantine Cannon in San Francisco. 

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The civil case names UnitedHealth Group, WellMed Medical Management, Health Net, Arcadian Management Services, Tufts Associated Health Plans, Aetna, Blue Cross and Blue Shield of Florida, Blue Cross Blue Shield of Michigan, Health, Inc., EmblemHealth, Inc., Managed Health dba Healthfirst New York, Humana, Medica Holding Company, WellCare Health Plans and MedAssurant.

All of the organizations are still named as defendants in the civil case, according to Jessica Moore, co-lead counsel on the case. The DOJ intervened only in the case against UnitedHealth Group and WellMed.

"Although the government did not intervene as to them, it has reserved the right to do so in the future," Moore said.

[Also: Justice Department joins whistleblower suit against Prime Healthcare, alleges CEO inflated Medicare admissions]

The suit has been kept sealed while the Justice Department investigated the claims. It was unsealed on Feb. 16 and is pending in federal court in Los Angeles.

Whistleblower Benjamin Poehling is now eligible to receive 15 to 25 percent of any civil recovery by the government.

No one at UnitedHealth Group could be immediately reached for comment.

[Also: UnitedHealth Group reports $1.9 billion in profit for last quarter of 2016]

UnitedHealth Group is the nation's largest health insurer and is a large operator of Medicare managed healthcare insurance plans.
It acquired WellMed in 2011.

An internal audit revealed provider overcoding, but the company failed to correct errors, return overpayments, or take meaningful steps to identify and rectify the problems with the claims it submitted to the Centers for Medicare and Medicaid Services, according to the lawsuit.

The lawsuit also claims UnitedHealth's top executives created a culture that demanded and rewarded increasing financial success of its risk adjustment efforts.

Twitter: @SusanJMorse