United Healthcare and two major subsidiaries allegedly had a multi-billion dollar Medicare fraud charged to their names on Tuesday, and one of theses subsidiaries, OptumInsight, was headed by President Obama’s former top insurance officials, according to The Daily Caller.
Federal prosecutors say the fraud – filed against United, Optum, and OptumInsight – lasted from 2005 to 2009. At the time, Andy Slavitt led the Center for Medicare and Medicaid Services (CMS) under Obama and the Obamacare health insurance program and was also CEO of OptumInsight and Group Executive Vice President for Optum.
The Department of Justice civil suit was filed Tuesday in the United States District Court for the Central District of California and claims that the United subsidiaries were behind the fraud.
“UHG knowingly obtained inflated risk adjustment payments based on untruthful and inaccurate information about the health status of beneficiaries enrolled in UHG’s Medicare Advantage Plans throughout the United States,” federal prosecutors claimed in their charge.
But United is fighting these allegations.
“We reject these more than 5-year-old claims and will contest them vigorously,” United spokesman Matthew Burns said in a statement, denying the allegations.
The most recent annual report from United and its Optum subsidiaries claims they earned “more than half a trillion” in “gross billed charges” in 2016.
According to Daily Caller, in this particular case the suit, which falls under the False Claims Act, allows whistleblowers to get a percentage of recovered funds if their charges of fraud against the government are successful. The whistleblower in this case, identified by prosecutors as Benjamin Poehling, was the Director of Finance for UHG’s Medicare & Retirement program at the time.
This isn’t the first time UHG has had charges of this stature filed against it. The service provider was recently involved in “United States ex rel. Swoben v. Secure Horizons,” earlier this month in another false claims case. Daily Caller reports a consultant to the risk adjustment health industry, James Swoben, filed those allegations.
“We’re going right down memory lane again because if you reflect in what happened in 2009, we have the same type of scenario again. It was not just a matter of people doing things, but it was processors done with algorithms,” Barbara Duck, a software developer who consults in the health IT field, told Daily Caller.
Obama’s top insurance official collected $4.8 million in UHG stock, tax free, when he left Optum to join CMS in 2013.
UHG allegedly collected “inflated” risk adjustment payments ranging over a decade and used phony diagnostic codes for its customers. The codes claimed they were more sick than what was actually reported in medical records. Essentially, United collected higher Medicare Advantage payments as a result.
“For payment years 2010 to 2015 combined, United obtained over $3 billion in additional risk adjustment payments from Medicare,” federal prosecutors said. “United improperly generated and reported skewed data artificially inflating beneficiaries’ risk scores and retained payments to which it was not entitled.”
Prosecutors added that UHG “incentivized” doctors to exaggerate their patient’s medical conditions through “gainsharing agreements.”
United “incentivized these providers to increase the number of diagnoses that they reported to United and to report diagnoses for more severe medical conditions,” prosecutors claimed.
“We have one-sided incentives or unbalanced incentives. For an insurer, all the signals facing them is to ‘maximize’ their revenues by boosting the health status of the patients” which make them seem sicker than they really are,” said Thomas Miller, an expert in health policy.
UHG is the country’s biggest insurance provider and the largest Medicare Advantage insurer.
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