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$1 billion+ False Claims Act case vs. UnitedHealth moves forward

Last year, the Justice Department launched two lawsuits against UnitedHealth, which it accuses of defrauding Medicare through its Medicare Advantage plans. One of those suits was dismissed in October. Now, a federal judge has ruled that the other case can move forward with certain claims dismissed.

According to the DOJ, UnitedHealth benefited by submitting invalid diagnostic data about Medicare Advantage plan participants. The allegedly untruthful, inaccurate information allowed UnitedHealth to get higher risk-adjustment payments from Medicare. Once the truth was discovered, between 2011 and 2014, according to the lawsuit, the insurer failed to repay Medicare by more than $1.14 billion.

These cases are interesting because they follow a 2016 decision by the U.S. Supreme Court. In that case, the high court held that it's not enough to allege a government contractor made a false statement. The allegedly statement must be material. In other words, any false statement must have an impact on whether the government would have paid out money.

In the first, dismissed, case, a judge ruled that the DOJ had not shown that the Centers for Medicare & Medicaid Services (CMS) would have refused payment if all the facts were known.

In this case, the DOJ alleged that UnitedHealth had made false statements attesting to the validity of the diagnostic data. The judge ruled that the government had failed to show that the false statements actually affected CMS's decision-making process. Presumably, it was the submission of the data itself, rather than any statements by UnitedHealth, that led to the payments being made. In any case, the false statements portion of the case was dismissed, but the remainder of the lawsuit will move forward.

As we have mentioned before, the False Claims Act invites concerned citizens to blow the whistle on waste, fraud and abuse in government programs. The whistleblowers are often employees or executives of companies that perform government contracts, as they are often in a good position to notice fraudulent practices. When the cases are successful, the whistleblowers receive a substantial percentage of the total recovery as a reward for their actions.

The continuing lawsuit here was originally filed by a whistleblower. In this case it was a former UnitedHealth executive. Later, the DOJ intervened in the case, which often positions these cases for success.

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