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DOJ Joins Whistleblower in Fraud Case Against UnitedHealthcare

The U.S. Department of Justice (DOJ) has joined a whistleblower’s False Claims Act lawsuit that alleges UnitedHealthcare fraudulently overbilled the government under its Medicare Advantage (MA) health plans. The whistleblower claims that UnitedHealthcare, among other MA policy insurers, incentivized its employees to inflate the so-called “risk adjustment factor (RAF).” The RAF was instituted by CMS in 2003 as a way of incentivizing MA plans to cover less healthy patients.

Last fall, audits by the Government Accountability Office (GAO) revealed that MA plans were fraudulently billing the federal government by manipulating the RAFs. The GAO estimated that in 2013 alone $14.1 billion was improperly billed to Medicare because of this practice of “upcoding” the risk scores.

The DOJ agreed to be a party to the lawsuit brought by a former UnitedHealthcare finance director and asked that documents related to that suit become public. The recently unsealed complaint shows that the case may be worth several billion dollars. The government would recover that money and pay the whistleblower a percentage of the damages obtained from UnitedHealthcare, if they settle or win the case in court.

In the complaint against UnitedHealthcare, the whistleblower alleged that the company created a corporate culture that rewarded increased RAFs. It was alleged that coding specialists would comb through patient records looking for medical conditions that would qualify the patient for a higher RAFs. The suit also alleges that contracted providers were offered incentives to find ways to upcode the medical record to a higher RAF.