Lawsuits accuse OptumHealth of hiding Medicaid billing errors

The company that oversaw New Mexico's Medicaid program and ignited claims that 15 behavioral health providers were defrauding the state program has suddenly found itself facing three lawsuits alleging it hid billing errors from the state, according to the Santa Fe New Mexican.

OptumHealth Inc. was tasked with managing Medicaid in New Mexico, and the company's fraud detection efforts led the state to pull Medicaid funding for 15 behavioral health providers based on "credible allegations of fraud" tied to $36 million in overpayments. The attorney general has cleared 13 of the 15 providers of criminal charges after a subsequent investigation found there did not appear to be a pattern of fraud.

Now OptumHealth, which is owned by UnitedHealth Group, is facing its own allegations of fraud, the article says. Two separate lawsuits filed by former OptumHealth employees allege the company failed to report Medicaid billing errors to the state. In a recently unsealed suit that was filed in 2012, former OptumHealth senior fraud investigator Valerie Tafoya claims she discovered $4 million in billing errors, but was told to keep quiet, and was subsequently fired when she reported concerns to the state attorney general's office, according to the New Mexican.

Tafoya also claims Optum's compliance manager--who pleaded no contest to 10 counts of falsifying documents in 2014--told employees to alter documents that indicated the company had not covered mental health treatments.

The suit also names CEO Michael Evans and COO Marilyn Van Horn, whom Tafoya claims told her not to investigate improper payments to providers with connections to certain state politicians.  

A second former employee has filed similar claims, and an Arizona behavioral health provider alleges OptumHealth accused providers of fraud because it couldn't make Medicaid payments.

OptumHealth has provided a financial boost for UnitedHealth Group, with its revenue growing 42 percent in 2015. New Mexico, meanwhile, has been engaged in a long running battle with behavioral health providers after pulling Medicaid funding in 2013. A 355-page audit was finally released by the New Mexico attorney general last year, leading to a full investigation that ultimately absolved the majority of providers of wrongdoing. The New Mexico Senate has since passed a bill preventing the state from prematurely revoking Medicaid funding to providers.

To learn more:
- read the Santa Fe New Mexican article

Related Articles:
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New Mexico attorney general releases long awaited behavioral health audit
New Mexico toes the thin line between overzealous detection and legitimate fraud prevention
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