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4-Traders Homepage  >  Equities  >  Nyse  >  UnitedHealth Group Inc    UNH

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UnitedHealth : targeted by whistleblower lawsuit

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02/17/2017 | 02:11pm EST

Feb. 17--A whistleblower lawsuit alleges that UnitedHealth Group's data analytics division helped the Minnetonka-based insurer and other health plans defraud the federal Medicare program by "upcoding" risk adjustment scores to boost payment rates.

A federal judge in California this week unsealed the lawsuit after the U.S. Department of Justice said it would join the case.

Matthew Burns, a spokesman for United, said in a statement: "We reject these more than five-year-old claims and will contest them vigorously."

When the initial lawsuit was filed in 2011, it named about a dozen health care companies. The government said it would move forward on claims against just two defendants -- United and a Texas company called WellMed, which United acquired about five years ago.

The whistleblower case focuses on claims submitted by "Medicare Advantage" health plans that are operated by private insurance companies to manage care for people covered by the government program for people age 65 and older.

Through a subsidiary formerly known as Ingenix, and now called OptumInsight, United "engaged in systematic fraud by assisting and causing [Medicare Advantage] organizations ... to submit fraudulent risk adjustment claims," the lawsuit states. "Through this fraudulent scheme, defendants have defrauded the United States of hundreds of millions -- and likely billions -- of dollars."

The lawsuit claims that insurers boosted risk scores by submitting claims for diagnoses that health plan members didn't have, or for which members weren't treated in the relevant year. Insurers also claimed that members were treated for more serious conditions than they actually had, according to the lawsuit.

In addition, insurers refused to correct claims submitted to the government, the lawsuit says, and reimburse Medicare.

Other health plans hired Ingenix for help with assessing risk scores, the lawsuit claims. In addition, UnitedHealthcare's Medicare Advantage plans used the service, according to the complaint. It say United's Medicare Advantage plans cover about 2.2 million people.

Burns, the UnitedHealth Group spokesman, said his company is "honored to serve millions of seniors through Medicare Advantage, proud of the access to quality health care we provided, and confident we complied with the program rules."

In whistleblower cases that allege false claims, lawsuits are filed by "relators" on behalf of the federal government. In the United case, the relator is Benjamin Poehling, a director of finance who started working for the company in Minnesota in 2004, according to the lawsuit.

False claim cases are filed to recover funds for the government, with relators receive a portion of any recoveries.

The government pays Medicare Advantage (MA) plans according to a per-member, per-month capitation rate. These rates are adjusted to reflect a beneficiary's age, gender and health status, with the lawsuit calling the health status adjustments one of the most significant components.

Plans receive close to $3,000 per year for each condition that a member has that requires a risk adjustment payment, according the lawsuit states.

The alleged boosting of risk adjustment scores stems from a corporate culture at United that "demands and rewards financial success from its employees," the lawsuit states. It adds that, until recently, the company evaluated employees including Poehling on their success at maximizing revenue by increasing risk scores.

Poehling said his March 30, 2008 review, for example, evaluated him against United's "business goal" of increasing risk scores by 3 percent, the lawsuit states. There were no similar performance goals for the overall accuracy of risk adjustment submissions, according to the lawsuit, nor was there any accountability assigned for reducing the number of false claims submitted.

In the lawsuit, Poehling said he received a $15,000 bonus in 2010 for helping his division's work to generate additional internal operating income from risk adjustment payments. The bonus "paled in comparison," the lawsuit says, with incentives offered to those higher in the company.

United's attitude about the possibilities with risk adjustment is summarized, the lawsuit says, by an internal e-mail between company executives that stated: "You mentioned vasculatory disease opportunities, screening opportunities, etc. with huge $ opportunities. Lets turn on the gas!"

The lawsuit describes a process whereby the Ingenix division conducted reviews on medical charts for enrollees in Medicare health plans from United and other insurers to justify risk adjustment scores. The reviews aggressively looked for ways to assign "incremental," or newly found, diagnosis codes to patient cases, the lawsuit states, but didn't fix errant codes that were being factored into the risk score.

In a filing with the court this week, the Justice Department said it would intervene with portions of the lawsuit dealing with chart reviews, claims verification, a coding compliance program and risk adjustment attestations.

Twitter: @chrissnowbeck

___

(c)2017 the Star Tribune (Minneapolis)

Visit the Star Tribune (Minneapolis) at www.startribune.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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Sales 2017 198 870 M
EBIT 2017 14 191 M
Net income 2017 8 607 M
Debt 2017 14 845 M
Yield 2017 1,37%
P/E ratio 2017 17,98
P/E ratio 2018 15,94
EV / Sales 2017 0,84x
EV / Sales 2018 0,75x
Capitalization 152 729 M
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