Whistleblower lawsuit filed in California against UnitedHealth Group is dismissed

A federal judge has dismissed a whistleblower lawsuit against Minnetonka-based UnitedHealth Group that alleged the nation's largest health insurer wrongly received higher payments from Medicare.

The payments, the suit alleged, were based on false information about enrollee health problems that could have been corrected.

The ruling, handed down late last week in the U.S. District Court for Central California, does not halt a parallel lawsuit from a whistleblower in the Twin Cities who raises similar allegations. In that case, UnitedHealth Group recently lost its motion for a change of venue.

Federal prosecutors opted to join both whistleblower cases against UnitedHealth Group earlier this year. In dismissing one of the cases last week, U.S. District Court Judge John Walter wrote that the government could still amend portions of the lawsuit, but said prosecutors failed to show that UnitedHealth executives knowingly submitted false attestations about the "risk adjustment" data.

Walter called the government's complaint "a classic 'shotgun pleading' " that failed to clearly identify the role of each named defendant.

"The complaint … fails to identify the corporate officers who signed the attestations or allege that those individuals knew or should have known that the attestations were false," the judge wrote.

"The government has not alleged that anyone at [UnitedHealth] undertook any action to shield the signatories of the attestations from gaining the necessary knowledge that would have demonstrated that they were false," Walter wrote. "Moreover, even though the government argues that it is sufficient for someone other than the signatories to have known the attestations were false, the government has failed to identify anyone at [UnitedHealth] who possessed the requisite knowledge."

A spokesman for the U.S. attorney prosecuting the case did not comment, nor did a spokesman for UnitedHealth Group.

The federal government filed its complaint in May. The government alleged that UnitedHealth and its subsidiaries combed through medical records to find data that might boost payments from Medicare, but did not "look both ways" to correct earlier data submissions that also generated payments.

Medicare is the federal health insurance program that primarily serves Americans 65 and older. A growing share of Medicare beneficiaries opt to receive their benefits through Medicare Advantage plans sold by private insurers.

UnitedHealth's health insurance division, UnitedHealthcare, is the nation's largest operator of Medicare Advantage plans. The complaint focuses on UnitedHealthcare's Medicare plan in California starting in 2005, as well as the plan's interaction with a large group of health care providers in that state.

In Medicare Advantage, the government pays health plans on a set per-member, per-month basis, and adjusts payments according to an individual's health risk. To obtain these risk adjustments for health status, Medicare Advantage plans submit diagnosis codes that the government uses to calculate a risk score for each beneficiary.

In general, risk scores are higher — and, therefore, generate higher payments to the insurer — when more codes are submitted, particularly for more serious conditions.

The complaint involves UnitedHealth Group's funding of the cost of medical record reviews for patients treated by the large health care provider in California, the lawsuit says, as well as the conception and direction of those chart reviews.

In his ruling, Walter wrote that a statute of limitations prevents the federal government from bringing claims based on violations that were committed before May 1, 2017, when prosecutors filed their complaint. The judge also wrote the complaint failed to allege the agency that runs Medicare would have refused to make risk adjustment payments had it known the facts about UnitedHealth's alleged involvement with the chart review process.

A whistleblower lawsuit from former UnitedHealth Group executive Benjamin Poehling, who worked for the company in the Twin Cities, is being heard by a different judge in California's central district. Last month, the judge denied a UnitedHealth Group motion to move the case to Washington, D.C., where the insurer has brought a lawsuit against the federal government over related Medicare risk adjustment rules.

In a statement last week, UnitedHealth Group said the date of its next filing in the Poehling case hasn't yet been determined. In the lawsuit against the federal government, the insurer this month expects to file its opening brief on the merits.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck