UPDATED: April 3 at 12:58 p.m.
The Department of Justice is urging the courts to reject a legal expert's report that puts its longstanding challenge to UnitedHealthcare's Medicare Advantage billing practices in jeopardy.
In a memorandum issued this week, DOJ argues that the court-appointed special master's report, which was released in March, erred in determining that the agency had not presented enough evidence to support the main claims in the case.
In addition, DOJ alleges that the special master is also pushing to make California's Central District Court "the first and only court in the nation to read a new requirement into the reverse False Claims Act." In the report, it interprets a key phrase in the FCA as requiring "proof of an affirmative act of deception," which DOJ says is "inconsistent with the text, structure and purpose of the FCA."
"Courts have uniformly rejected defendants’ attempts to add such a requirement," DOJ wrote in the filing.
The legal case, which was first filed by a whistleblower in 2011 and later joined in 2017 by DOJ, claims that UnitedHealth would review patients' medical records, identifying scenarios where it was underpaid but ignoring overbilling. Through this process, it could boost its risk scores and ensuing Medicare Advantage payments.
Given the issues that it's arguing are present in the special master's report, DOJ said that UnitedHealth should still be made to stand trial in the case.
"This Court should decline to adopt the Special Master’s recommendation and instead follow the established canons of statutory interpretation and federal jurisprudence, which compel the conclusion that a defendant 'improperly avoids' an obligation to pay money to the government when the defendant has notice of a potential issue, is legally obligated to address it and does nothing," DOJ wrote.
UnitedHealth Group notched a major court win in a legal challenge over its Medicare Advantage (MA) billing practices that is stretching into its second decade.
The suit was first filed by a whistleblower in 2011, and the Department of Justice (DOJ) joined the case in 2017. The court-appointed special master released its report this week, in which, after reviewing the evidence, it determined "that the government is lacking any evidence in support of two essential elements of its False Claim Act and related common law claims."
The suit alleges that UnitedHealth conducted reviews of patients' medical records that allowed it to identify underpayments while ignoring instances of overbilling. This would enable the company to juice its risk scores and thus its MA payouts.
The whistleblower, Benjamin Poehling, was at one time the finance director for UnitedHealth's Medicare and retirement division.
In the lawsuit, the feds argue that the billing practices allowed UHG to pocket $2.1 billion. The special master rebuffed an analysis from a government expert who identified 1.97 million codes among 28 million that were allegedly unsupported by the patients' diagnoses.
The special master noted in its report that the expert did not review medical charts before making this determination.
A federal judge dismissed multiple claims in the case in 2018 but allowed it to move forward. Shortly after, the DOJ abandoned most of its allegations in the case.
The special master's report recommends that the courts grant UHG a summary judgement and reject the DOJ's request for partial summary adjudication.
The government failed to present evidence that would lead a jury to "reasonably conclude" that any individual, let alone each, code submitted by UHG was invalid, according to the report.
"Not only was there no evidence of deception as required to establish reverse FCA liability for the 'improper' avoidance of an obligation to repay the government, but the evidence presented actually showed that United was seeking guidance from the agency and transparent about its practices," the special master wrote in the report. "Nothing United allegedly did or did not do prevented the government from acquiring knowledge of United’s medical record review program."
"There simply was no fraud," according to the report.
In a statement, UnitedHealth emphasized that its "business practices have always been transparent, lawful and approved by our regulator, CMS."
"After more than a decade of DOJ’s wasteful and expensive challenge to our Medicare Advantage business, the Special Master concluded there was no evidence to support the DOJ’s claims we were overpaid or that we did anything wrong," the company said.
A judge will now be tasked with ruling on whether the case will move forward.
Regulators have long been concerned about insurers' billing practices in MA, including strategies they can use to increase their payouts.
Reports surfaced in late in February in The Wall Street Journal that the DOJ was investigating UnitedHealth's practices in particular, to which the company responding by saying that "we are not aware of the 'launch' of any 'new' activity as reported by the Journal."