Court denies feds' motion to consolidate Medicare Advantage whistleblower cases

The federal government has intervened in two whistleblower cases against UnitedHealth, but will not be able to consolidate those cases, at least for now. (Getty/eccolo74)

A district court judge has denied the federal government’s motion to consolidate two whistleblower cases it recently joined that accuse UnitedHealth of fraudulently inflating its Medicare Advantage risk scores.

The Department of Justice announced in February that it would intervene in the case brought by Benjamin Poehling, a former executive at UnitedHealth who accused 15 insurance companies of False Claims Act violations related to their MA risk adjustment practices. The DOJ is only intervening, however, in the cases involving UnitedHealth and its subsidiary, WellMed Medical Management.

Then, in late March, the DOJ elected to intervene in another case that whistleblower James Swoben first brought in 2009. In that case, Swoben accused UnitedHealth of conducting biased retrospective reviews of medical records in an effort to boost the amount of government reimbursement it receives.

The DOJ also asked the court to consolidate the two cases, but a decision (PDF) issued Thursday by the U.S. District Court for Central District of California denied that motion—at least for now.

The government has not proven “that there are significant advantages to be gained from consolidating the cases now rather than waiting and revisiting the issue in a few months,” the ruling said.

For one, consolidating the cases might slow the pace of the Swoben suit while the court works to resolve any preliminary motions in the Poehling suit, the ruling said. In addition, UnitedHealth has indicated it will file two motions—one seeking a change of venue and another to dismiss the Poehling case—that might be more efficiently addressed if the cases are separate, the ruling noted.

The court’s decision not to consolidate the Swoben and Poehling cases comes on the heels of another procedural victory for UnitedHealth, as earlier this month a federal judge ruled the insurer can move forward with a lawsuit challenging a federal rule that requires MA plans to return overpayments within 60 days.

That ruling might also help UnitedHealth’s defense in the two whistleblower cases, as a Star Tribune article pointed out. It showed that the government increased the level of auditing insurers were required to conduct on patients’ medical records starting in 2014, yet the whistleblower cases could end up accusing UnitedHealth of not complying with auditing standards before 2014.

In other words, as UnitedHealth said in a statement to the publication, “the government is trying to hold health plans to a standard the court has now said didn't exist.”

Meanwhile, one lawmaker is putting political pressure on the Centers for Medicare & Medicaid Services regarding its oversight of MA health plans. Sen. Chuck Grassley, R-Iowa, sent a letter to CMS Administrator Seema Verma asking her to explain why the agency failed to collect nearly $125 million in potential overcharges identified at five MA plans that were audited in a single year.

“The difference in the assessment and the actual recovery is striking and demands an explanation,” he wrote.

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