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Qui tam alleges auto insurance companies not paying back Medicaid and Medicare?

On Behalf of | Aug 27, 2021 | Medicare / Medicaid Fraud

Three hundred and fifteen insurance companies are accused of leaving taxpayers with the bill. In what may be the largest whistleblower lawsuit in U.S. history, the multibillion-dollar whistleblower lawsuit alleges that the carriers did not cover the medical costs initially paid by Medicare and Medicaid when drivers got medical care after accidents. The qui tam lawsuit is on behalf of the U.S. government, New York, Connecticut, and several other states.

There is no exact number listed in the 215-page lawsuit, instead claiming the companies owe billions to the government. The lawsuit also alleges that the insurance companies were well-aware of defrauding the government in a systematic effort to avoid acknowledging their obligations making millions of payment claims. The lawsuit was filed two years ago and has been under seal until August 12, 2021.

This argument is supported using data specialists who crunched the numbers on:

  • Accident reports
  • Medicare and Medicaid claims
  • Hospital reports
  • Reimbursement data

The lawsuit also alleges that government health care plans should pay last or not at all when there is primary or private coverage. It also asserts that the companies should pay the government within 60 days if they do not initially pay for care.

Medicare too often in the dark

In addition, the lawsuit points out that Medicare often did not know how much money private insurers owed it. This situation was supposed to change when Congress enacted a new policy called Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), requiring insurance companies to notify Medicare when it pays one of its beneficiaries’ medical expenses. It would theoretically allow Medicare to identify when it needs to recoup the medical payments it paid.

“Contrary to congressional intent, (insurance companies) have built into their business model a scheme to ensure that Medicare remains in the dark as to the majority of unreimbursed secondary payments,” the suit states.

We will continue to follow this story in the coming months.