Earlier this month, DOJ filed its complaint-in-intervention alleging FCA claims in the long pending Medicare Advantage case U.S. ex rel. Swoben v. Secure Horizons.  The U.S. Court of Appeals for the Ninth Circuit revived this matter last year when it held that the design of a retrospective review to avoid discovery of unsupported diagnoses submitted for risk adjustment can give rise to FCA liability resulting from false certifications.   DOJ intervened in March 2017 only as to the UnitedHealth Group parties in the case.  DOJ had intervened previously as to the SCAN defendants, who settled their portion of the case for $322 million in August 2012.

DOJ’s complaint alleges that UnitedHealth arranged for blind retrospective review of charts from provider group HealthCare Partners and then submitted diagnoses that had not been reported by the provider.  UnitedHealth then allegedly avoided comparing the results of the blind review to codes that the providers had submitted for purposes of validation.  The complaint alleges that this conduct, combined with specifically alleged knowledge that a significant percentage of provider submitted codes were inaccurate, resulted in false certifications by UnitedHealth under 42  C.F.R. § 422.504(l), which requires that the risk adjustment data submitted be certified as accurate, complete, and truthful.

This theory tracks closely with the theory that the Ninth Circuit endorsed in its opinion last year.  The Ninth Circuit explained that MAOs always have had an affirmative obligation to conduct due diligence to ensure the accuracy, completeness, and truthfulness of the data submitted for risk adjustment.  It also explained that in adopting the best knowledge, information, and belief standard in Section 422.50(l), the government had made clear that this encompassed not only actual knowledge, but also reckless disregard and deliberate ignorance—the same standard for liability under the FCA.  United States v. United Healthcare Insurance Company, 848 F.3d 1161 (9th Cir. 2016).

The specific events that DOJ has alleged in its complaint to show the requisite intent of UnitedHealth included:

• CMS and internal audits performed on provider-reported coding that showed 18-32% of codes were not supported;
• A series of presentations to UnitedHealth’s senior management explaining that “provider coding is highly inaccurate and incomplete” and that more than 30% of coded conditions are not supported; and
• Data analysis performed by UnitedHealth showing providers with abnormally high average risk scores.

Swoben is one of two FCA cases involving risk adjustment currently pending against UnitedHealth in the United States District Court for the Central District of California.  DOJ’s complaint-in-intervention is expected to be filed in US ex rel. Poehling v. UnitedHealth Group later this month. We covered Poehling in an earlier post here.  DOJ has sought to consolidate these two cases against UnitedHealth, but its request has been denied as premature by the district court.