California Judge Dismisses FCA Case Against UnitedHealth Group

samuel-zeller-360588-copy-200x300In early October, a California federal judge dismissed without prejudice a False Claims Act (FCA) lawsuit against UnitedHealth Group Inc. (UHG). The suit, U.S. ex rel. Swoben v. Secure Horizons, et al., alleged UHG ignored questionable diagnoses that led to higher reimbursements through the Medicare Advantage program. This is significant news for the U.S. Department of Justice (DOJ). The UHG case was the first FCA suit related to the Medicare Advantage program that the DOJ joined. This was essentially a test case to determine the strength of the DOJ’s position and the ability to bring similar cases in the future. Unfortunately, this dismissal signals there were numerous weaknesses in the DOJ’s FCA case.

The Basis for the FCA Claim

This qui tam suit was brought by a whistleblower who alleged UHG knowingly ignored questionable patient charts reviewed by another company, Healthcare Partners LLC. These charts, whether or not they had appropriate evidence, contained diagnoses that would increase the insurer’s risk adjusted payments under the Medicare Advantage program. Under Medicare Advantage, healthcare providers receive higher reimbursements for caring for sicker patients.

The Reasons for the Dismissal

The California federal judge found the DOJ’s complaint lacking. The judge stated the complaint included only conclusory allegations of material violations of the FCA instead of identifying truly material violations that satisfy the test laid out in the U.S. Supreme Court decision in Universal Health Services v. Escobar. This led to a crucial lack of materiality and particularity, which are required to move forward with a complaint.

The judge also stated the complaint was too vague and failed to fully support the allegation that UHG had knowledge of the false claims. In fact, the DOJ had not identified any specific individual at UHG who knew the information regarding patient diagnoses was inaccurate. This was a crucial lack of what is known as scienter, which briefly means knowledge of wrongdoing.

Essentially, the DOJ and whistleblower did not have enough initial proof of their accusations for the judge to allow the case to move forward. However, the DOJ has the option to continue its investigation and file a new, stronger complaint in the future.

The DOJ Continues to Pursue Medicare Advantage Fraud

While this dismissal is a difficult outcome for the federal government, the DOJ is not finished pursuing fraud related to the Medicare Advantage program. The DOJ has previously filed suit against other health care providers and received settlements from them. The DOJ also still has a similar suit, U.S. ex rel. Benjamin Poehling v. UnitedHealth Group, Inc., against UHG pending in federal court.

Do You Have Information About Healthcare Fraud?

If you have information about a physician, insurer, or other medical business submitting false claims to a federal or state healthcare program, contact our experienced healthcare fraud attorneys at Brod Law Firm today. If you have unique, private information regarding fraud, you may have the right to be a whistleblower and bring a qui tam case on behalf of the government. If the government receives a court award or settlement, you will partake in part of it.

To learn more, call us at Brod Law Firm at (800) 427-7020 to schedule a free consultation.

(image courtesy of Samuel Zeller)