Medicare Fraud Case: UnitedHealth Wins Ruling
UnitedHealth Group secured a significant legal victory Monday when a special master ruled that the Justice Department failed to prove its allegations in a years-long Medicare Advantage fraud case. The government had accused the nation’s largest Medicare Advantage insurer of exaggerating patient illnesses to pocket over $2 billion in overpayments, but Special Master Suzanne Segal found insufficient evidence to support these claims.
DOJ’s Fraud Case Collapses
“A mere possibility of an overpayment is not enough for the government to carry its burden,” Segal wrote in her initial ruling. She recommended dismissing the case, which began as a whistleblower lawsuit in 2011 filed by former UnitedHealth employee Benjamin Poehling. The Justice Department officially joined the case in 2017.
UnitedHealth spokesperson Heather Soule celebrated the decision, stating: “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 Justice Department declined to comment on the ruling, which was filed in federal court in Los Angeles. Attorneys for the whistleblower also had no comment.
Medicare Advantage Payment Structure Explained
Medicare Advantage plans receive higher payments for covering sicker patients, but these health conditions must be properly documented in medical records. The DOJ alleged that Medicare paid UnitedHealth Group more than $7.2 billion from 2009 through 2016 based on the company’s chart review program, which added medical billing codes to patient files.
According to the government, Medicare would have paid $2.1 billion less if UnitedHealth had removed unsupported billing codes. The Justice Department further claimed that during these reviews, the insurer ignored potential overcharges that might have reduced payments.
Special Master’s Key Findings
Special Master Segal, appointed by U.S. District Judge Fernando Olguin, determined the government’s case “depends entirely on speculation and assumptions about what the codes found by the United coders actually mean.”
Legal expert William Hanagami, who represented a whistleblower in a separate Medicare Advantage fraud case, called the ruling “a major defeat for the government” and anticipated an appeal.
Transparency Undermined Government Claims
Critically, Segal noted that UnitedHealth executives had openly discussed their chart review practices with Centers for Medicare & Medicaid Services (CMS) officials during an April 2014 meeting. At that time, CMS was considering restricting chart reviews but abandoned the regulation after industry pressure.
The special master pointed out that United had actually requested this meeting with CMS officials, which she characterized as “the opposite of concealment.”
“The government knew of the very chart review practices which it now claims United prevented it from learning, and thus the government cannot have been duped into relying on any action or inaction by United,” Segal wrote.
Audit Results Supported UnitedHealth
Segal highlighted that CMS audits of UnitedHealth’s Medicare Advantage plans found approximately 89% of billing codes were supported by patient medical records. These audit findings “undercut” the government’s allegations of widespread overbilling.
“This litigation has been pending for more than a decade,” she emphasized, “and the government has had ample opportunity to develop evidence in support of its theories. It has not.”
Industry Under Continued Scrutiny
Despite this victory, UnitedHealth still faces renewed investigations into its Medicare Advantage coding practices, including a new Justice Department review. The ruling comes as Medicare Advantage plans have grown substantially, now enrolling about 33 million members—over half of Medicare-eligible individuals.
The industry continues to face dozens of whistleblower lawsuits and government audits alleging excessive costs to taxpayers. Just last month, Senate Judiciary Committee chair Chuck Grassley (R-Iowa) demanded UnitedHealth explain its billing practices.
As Medicare Advantage enrollment continues to expand, the tension between government oversight and industry practices remains a critical issue for healthcare policy and taxpayer protection.
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