(Adds further details on lawsuit, comment from UnitedHealth)
By Nate Raymond
May 2 The U.S. Justice Department has accused
UnitedHealth Group Inc of obtaining inflated payments
from the government based on inaccurate information about the
health status of patients enrolled in its largest Medicare
The complaint, filed in federal court in Los Angeles on
Monday, came after the Justice Department earlier this year
intervened in two separate whistleblower lawsuits against the
country's largest health insurer.
"This action sends a warning that our office will continue
to scrutinize and hold accountable Medicare Advantage insurers
to safeguard the integrity of the Medicare program," Acting U.S.
Attorney Sandra Brown in Los Angeles said in a statement.
Matthew Burns, a UnitedHealth spokesman, said the company
complied with relevant rules and was transparent "about how we
interpreted the government's murky policies."
"We reject these claims and will contest them vigorously,"
he said in a statement.
UnitedHealth's stock was trading down 0.58 percent at
$173.57 on the New York Stock Exchange following the Justice
Department's announcement of the case.
Medicare Advantage, an alternative to the standard
fee-for-service Medicare in which private insurers manage health
benefits, is the fastest growing form of government healthcare,
with enrollment of 18 million people last year.
UnitedHealth is the country's largest Medicare Advantage
organization, receiving billions of dollars from the U.S.
Centers for Medicare & Medicaid Services to provide healthcare
to people enrolled in its plans, the lawsuit said.
The lawsuit said that since at least 2005, UnitedHealth knew
many of the diagnosis codes it submitted to the Medicare program
for increased payments based on "risk" factors like patient
health status were not supported by patients' medical records.
But the company turned a blind eye and funded and encouraged
one-sided chart reviews of patients of HealthCare Partners,
which provided services to UnitedHealth beneficiaries in
As a result, UnitedHealth was able to wrongfully retain risk
adjustment payments it received from the government, the lawsuit
The complaint was filed after the Justice Department
partially intervened in a whistleblower lawsuit brought by James
Swoben, a former employee of Senior Care Action Network Health
Plan and a consultant to the risk adjustment industry.
The Justice Department said it planned to file a second
complaint by May 16 against UnitedHealth after intervening in
another whistleblower lawsuit.
Both cases were filed under the False Claims Act, which
allows whistleblowers to sue on the government's behalf to
recover taxpayer money paid out based on fraudulent claims. If
successful, whistleblowers receive a percentage of the recovery.
The case is U.S. ex rel Swoben v. Secure Horizons et al,
U.S. District Court, Central District of California, No.
(Reporting by Nate Raymond in Boston; Editing by Andrew Hay)