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The Siege Continues: The Justice Department is Investigating Four Additional Medicare Advantage Plans

In our prior blog post, we reported that, at the request of the federal Department of Justice, the FCA qui tam whistleblower lawsuit in the case of United States ex rel Benjamin Poehling v. United HealthGroup, Inc., et. al. was unsealed on February 15, 2017.  The complaint alleges that United HealthGroup, as well as a number of other defendants, had fraudulently collected “hundreds of millions—and likely billions—of dollars” in Medicare Advantage risk payments by claiming patients were sicker than they really were.  At the time of the unsealing, the Department of Justice partially intervened in the lawsuit against only two of the defendants – UnitedHealth Group and WellMed Medical Management, Inc. – and declined to intervene against the other defendants.

This lawsuit, as well as other enforcement actions, make clear that the approach of Medicare Advantage Plans to risk adjustment reimbursement has caught the attention of both the federal government and the qui tam bar and that we can only expect more lawsuits and enforcement initiatives to come.  As a result, we suggested that Medicare Advantage plans need to proactively and immediately conduct a comprehensive review of their overall approach to the HCC-RAF risk adjustment process.

Now, the urgency for Medicare Advantage Plans to proactively and immediately conduct a comprehensive review of their overall approach to the HCC-RAF risk adjustment process has been underscored by the government’s announcement in court papers filed last week that it is investigating at least four other Medicare Advantage Plans in the Poehling case, in addition to United HealthGroup and WellMed.  Specifically, the Department of Justice filed a “Corrected Notice of Election” to intervene in the Peohling case, indicating that, despite its statement last month that it was declining to intervene against the other defendants in the case, it “has been conducting, and continues to conduct, on-going investigations” of other defendants, besides United HealthGroup and WellMed (emphasis added).  The government specifically noted that it will continue its investigations of Health Net, Inc., Aetna, Inc., Bravo Health, Inc. (which is part of Cigna), and Humana, Inc.

The government stressed that, until those on-gong investigations are completed, it cannot reach a decision about those defendants’ liability under the False Claims Act as to the “truthfulness of their claims to the Medicare Program for risk adjustment payments, the truthfulness of their risk adjustment attestations to the Medicare Program, or their possible improper avoidance of returning overpayments.”  The government should be filing it compliant in invention against United and WellMed by May 16th.

Keep tuned for further developments against the other defendants and against other possible targets.  In the meantime, it is certainly prudent for Medicare Advantage Plans to consider an internal review that includes a careful examination not only of auditing protocols, but also of all relevant operational issue ranging from how relationships with providers and vendors are being handled and overseen to how incentive compensation is structured for employees, vendors and providers.

Copyright © 2017, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Steven J. Chananie, Sheppard Mullin, complex healthcare transactions lawyer, compliance arrangements attorney
Partner

Steven Chananie is a partner in the Corporate Practice Group in the firm's New York office, focusing on healthcare issues. Mr. Chananie has represented numerous healthcare providers, advising them on regulatory and fraud and abuse issues in the structuring of complex healthcare transactions and arrangements; guiding them in the resolution of potential compliance problems; and assisting them in implementing or modifying their compliance programs.  Mr. Chananie has also defended numerous clients against civil government actions and investigations, including in False Claims...

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