A US Justice Department case against UnitedHealth Group Inc. hit a snag March 3 as a special master ruled that the government has failed to prove its case seeking to force the return of billions of dollars in alleged Medicare Advantage overpayments.
The long-running case alleges that UnitedHealth obtained inflated risk adjustment payments based on untruthful and inaccurate information about the health status of beneficiaries enrolled in UHC of California, UnitedHealth's largest Medicare Advantage Plan.
Medicare Advantage, an expanded version of government-subsidized health insurance aimed at seniors, has been a hot-button issue for insurers and regulators in recent years.
Following a recent motion for summary judgment from UnitedHealth and a motion for partial summary judgment on behalf of the DOJ, Special Master Suzanne Segal found that the DOJ had not presented evidence to support its claim that the giant health insurer inflated how sick patients were to pocket more than $2 billion in overpayments illegally.
"Without review of the medical records, a jury would be required to speculate as to whether the diagnosis codes were actually incorrect," Segal wrote. "A mere possibility of an overpayment is not enough for the government to carry its burden for purposes of avoiding summary judgment."
Segal's recommendation will be presented to the federal judge handling the case and can be appealed.
Neither UnitedHealth nor the DOJ responded to requests for comment regarding the case.
The fraud case began in 2011 and was filed by former UnitedHealth employee Benjamin Poehling before the DOJ took over the case in 2017.
UnitedHealth has been under heightened scrutiny by the DOJ in recent years, occasionally resulting in legal action.
In 2022, the DOJ lost a case to stop the merger of UnitedHealth and Change Healthcare Inc., a data analysis service provider for many major managed care insurers at the time. In 2024, the DOJ filed a similar lawsuit to stop UnitedHealth from merging with home health provider Amedisys Inc., an ongoing case that has delayed the merger.
In February, the DOJ launched a civil fraud investigation into UnitedHealth's Medicare billing practices, people familiar with the matter told The Wall Street Journal. The probe will focus on the company's methods for documenting diagnoses that lead to increased payments for its Medicare Advantage plans, much like the ongoing lawsuit.
