Judge allows slimmed-down fraud case against UnitedHealth to move forward

Gavel and flag in courtroom
UnitedHealth says it will "continue to aggressively contest" the fraud allegations against it. (Getty/AlexStar)

A federal judge has ruled that the U.S. government’s remaining fraud case against UnitedHealth can move forward, despite dismissing some claims against the insurer.

The case in question is one of two whistleblower lawsuits joined by the Department of Justice, which accuse UnitedHealth of gaming the Medicare Advantage risk adjustment system to inflate its reimbursement from the government.

In October, a federal judge dismissed one of those cases, ruling that the DOJ failed to prove that the government would not have continued making payments to UnitedHealth had it been aware of the practices alleged in the lawsuit. Though the DOJ has since amended its other complaint against UnitedHealth, the insurer petitioned the court to dismiss that case as well.

RELATED: Whistleblower speaks out about Medicare Advantage fraud claims against UnitedHealth

In a ruling (PDF) this week on that motion, U.S. District Court Judge Michael Fitzgerald agreed to dismiss claims against UnitedHealth pertaining to risk adjustment payments made before 2009, and ordered the DOJ to amend other claims.

But he allowed other claims to survive, including those that allege the defendants failed to delete invalid diagnosis codes “despite information available to them.”

In a statement to FierceHealthcare, UnitedHealth spokesman Matthew Burns said the company rejects the government’s remaining claims “and will continue to aggressively contest them.”

The case was originally brought by whistleblower James Poehling, who once was the finance director for the insurer’s Medicare and Retirement division. The suit was unsealed in 2017 when the DOJ opted to join the case.

Poehling’s allegations centered on the claim that UnitedHealth conducted one-sided retrospective reviews of patients’ medical records in a scheme to report underpayments and ignore overpayments. The government uses insurer-reported data on patients' medical conditions at adjust its baseline payments to MA plans, with the goal of aligning compensation with members’ actuarial riskand dissuading insurers from cherry-picking healthy members.

Meanwhile, UnitedHealth is involved in a separate, ongoing lawsuit that alleged the government put an unfair burden on Medicare Advantage health plans with its requirements to report and return overpayments.