UnitedHealth Wellmed Overlooks Provider Overcoding and Overpayments Leading to False Claims Act Allegations

Our Los Angeles and Orange County based False Claims Act (“FCA”) attorneys report that the Department of Justice recently joined a whistleblower lawsuit against the UnitedHealth Group and Wellmed.  The main allegations claim that UnitedHealth Group, the country’s largest healthy insurer and Wellmed Medical Management overbilled and defrauded the Medicare Part C Managed Care program by hundreds of millions of dollars by claiming that its members were sicker than they really were.   Once a managed care organization (“MCO”) such as UnitedHealth improperly inflates the number and type of care that its members receive, that translates to higher payments by the state and federal government agencies that take care of these members (primarily Medicaid, or Medi-Cal in California, and Medicare).  If the MCO reports that its members needed treatment for conditions that they did not have or were not treated for, that inflates the risk score which increases payments by the government in future years.  The lawsuit was recently unsealed in federal court in Los Angeles, and the whistleblower is eligible to receive 15 to 25 percent of any recovery which can add up to millions.

There has been a lot of recent activity related to MCOs attempting to increase profits by suppressing utilization or submitting inaccurate rate data.  One of the main statutes used by qui tam plaintiffs, or relators, is the Deficit Reduction Act of 2005 (DRA) which aims to control Medicaid spending by incentivizing the states to adopt false claims laws mirroring the federal FCA.   It is an uphill battle, but courts have started to entertain the idea that billing for capitated Medicaid payments while failing to comply with the state/federal regulations and the government contracts leads to CA liability for the MCO.

A theory used by some qui tam relators is the “Conditions of Participation” theory where prosecutors find deficient or fraudulent claims processing, data reporting (or underreporting), and financial mis-management by the MCO.  The FCA is then used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.