DOJ abandons Medicare fraud suit against UnitedHealth

Rather than rework and refile its recently dismissed False Claims Act lawsuit against UnitedHealth, the Department of Justice has opted to abandon the case.

The move comes just about a week after a federal judge dismissed the DOJ's case against UnitedHealth and several of its affiliates. The suit had accused them of gaming the Medicare Advantage program by funding medical chart reviews in order to increase risk adjustment payments from the government, but ignoring when those reviews uncovered invalid diagnoses in order to avoid returning overpayments.

The DOJ joined the case, originally brought by whistleblower James Swoben, this past spring. The suit also named the provider group HealthCare Partners as a defendant, but the government only intervened in the case against UnitedHealth.

RELATED: Why the DOJ's Medicare Advantage fraud lawsuits won't likely hurt UnitedHealth's bottom line 

In his recent order dismissing the case against UnitedHealth, Judge John F. Walter left the door open for the DOJ to amend its complaint and refile it by Oct. 13. However, a notice (PDF) filed late last week showed that the government does not plan to do so.

One reason could be because the judge barred the government from filing claims that occurred prior to May 1, 2007, having noted that the False Claims Act prevents whistleblowers from bringing a claim more than 10 years after the violation occurred. The DOJ’s complaint-in-partial intervention had alleged claims going back to 2005.

This is the second whistleblower case the DOJ has joined against UnitedHealth that takes issue with its risk adjustment practices. The other case, brought by whistleblower Benjamin Poehling, is still active, and names 15 insurers in total—though the DOJ only intervened in the case against UnitedHealth. The government had tried to combine the Poehling and Swoben cases, but its motion was denied.

The DOJ’s decision to give up on the Swoben case is a significant victory for UnitedHealth, which has denied the allegations against it and said it’s confident that it complied with Medicare Advantage program rules in its risk adjustment practices.

“We are pleased with the government's decision to dismiss these meritless claims," UnitedHealth spokesman Matthew Burns said via email.