A decade in the past, federal officers drafted a plan to discourage Medicare Benefit well being insurers from overcharging the federal government by billions of {dollars} — solely to abruptly again off amid an “uproar” from the trade, newly launched courtroom filings present.
The Facilities for Medicare & Medicaid Companies revealed the draft regulation in January 2014. The rule would have required well being plans, when inspecting affected person’s medical data, to determine overpayments by CMS and refund them to the federal government.
However in Could 2014, CMS dropped the thought with none public rationalization. Newly launched courtroom depositions present that company officers repeatedly cited concern about stress from the trade.
The 2014 resolution by CMS, and occasions associated to it, are on the middle of a multibillion-dollar Justice Division civil fraud case towards UnitedHealth Group pending in federal courtroom in Los Angeles.
The Justice Division alleges the enormous well being insurer cheated Medicare out of greater than $2 billion by reviewing sufferers’ data to seek out extra diagnoses, including income whereas ignoring overcharges which may cut back payments. The corporate “buried its head within the sand and did nothing however preserve the cash,” DOJ mentioned in a courtroom submitting.
Medicare pays well being plans larger charges for sicker sufferers however requires that the plans invoice just for situations which are correctly documented in a affected person’s medical data.
In a courtroom submitting, UnitedHealth Group denies wrongdoing and argues it shouldn’t be penalized for “failing to comply with a rule that CMS thought-about a decade in the past however declined to undertake.”
This month, the events within the courtroom case made public 1000’s of pages of depositions and different data that provide a uncommon glimpse contained in the Medicare company’s long-running wrestle to maintain the non-public well being plans from taking taxpayers for a multibillion-dollar trip.
“It’s straightforward to dump on Medicare Benefit plans, however CMS made a whole boondoggle out of this,” mentioned Richard Lieberman, a Colorado well being knowledge analytics knowledgeable.
Spokespeople for the Justice Division and CMS declined to remark for this text. In an e-mail, UnitedHealth Group spokesperson Heather Soule mentioned the corporate’s “enterprise practices have all the time been clear, lawful and compliant with CMS laws.”
Missed Diagnoses
Medicare Benefit insurance coverage have grown explosively in recent times and now enroll about 33 million members, greater than half of individuals eligible for Medicare. Alongside the best way, the trade has been the goal of dozens of whistleblower lawsuits, government audits, and different investigations alleging the well being plans usually exaggerate how sick sufferers are to rake in undeserved Medicare funds — together with by doing what are known as chart evaluations, supposed to seek out allegedly missed analysis codes.
By 2013, CMS officers knew some Medicare well being plans have been hiring medical coding and analytics consultants to aggressively mine affected person information — however they doubted the company’s authority to demand that well being plans additionally search for and delete unsupported diagnoses.
The proposed January 2014 regulation mandated that chart evaluations “can’t be designed solely to determine diagnoses that will set off extra funds” to well being plans.
CMS officers backed down in Could 2014 due to “stakeholder concern and pushback,” Cheri Rice, then director of the CMS Medicare plan cost group, testified in a 2022 deposition made public this month. A second CMS official, Anne Hornsby, described the trade’s response as an “uproar.”
Precisely who made the decision to withdraw the chart evaluate proposal isn’t clear from courtroom filings thus far.
“The course that we obtained was that the rule, the ultimate rule, wanted to incorporate solely these provisions that had large, you already know, widespread stakeholder help,” Rice testified.
“So we didn’t transfer ahead then,” she mentioned. “Not as a result of we didn’t suppose it was the proper factor to do or the proper coverage, however as a result of it had blended reactions from stakeholders.”
The CMS press workplace declined to make Rice obtainable for an interview. Hornsby, who has since left the company, declined to remark.
However Erin Fuse Brown, a professor on the Brown College Faculty of Public Well being, mentioned the choice displays a sample of timid CMS oversight of the favored well being plans for seniors.
“CMS saving cash for taxpayers isn’t sufficient of a cause to face the wrath of very highly effective well being plans,” Fuse Brown mentioned.
“That’s extraordinarily alarming.”
Invalid Codes
The fraud case towards UnitedHealth Group, which runs the nation’s largest Medicare Benefit plan, was filed in 2011 by a former firm worker. The DOJ took over the whistleblower go well with in 2017.
DOJ alleges Medicare paid the insurer greater than $7.2 billion from 2009 by 2016 solely based mostly on chart evaluations; the corporate would have obtained $2.1 billion much less if it had deleted unsupported billing codes, the federal government says.
The federal government argues that UnitedHealth Group knew that many situations it had billed for weren’t supported by medical data however selected to pocket the overpayments. As an example, the insurer billed Medicare practically $28,000 in 2011 to deal with a affected person for most cancers, congestive coronary heart failure, and different critical well being issues that weren’t recorded within the particular person’s medical report, DOJ alleged in a 2017 submitting.
In all, DOJ contends that UnitedHealth Group ought to have deleted greater than 2 million invalid codes.
As an alternative, firm executives signed annual statements testifying that the billing knowledge submitted to CMS was “correct, full, and truthful.” These actions violated the False Claims Act, a federal legislation that makes it unlawful to submit bogus payments to the federal government, DOJ alleges.
The complicated case has featured years of authorized jockeying, even pitting the recollections of key CMS employees members — together with a number of who’ve since departed authorities for jobs within the trade — towards these of UnitedHealthcare executives.
‘Purple Herring’
Court docket filings describe a 45-minute video convention organized by then-CMS administrator Marilyn Tavenner on April 29, 2014. Tavenner testified she arrange the assembly between UnitedHealth and CMS employees on the request of Larry Renfro, a senior UnitedHealth Group government, to debate implications of the draft rule. Neither Tavenner nor Renfro attended.
Two UnitedHealth Group executives on the decision mentioned in depositions that CMS staffers informed them the corporate had no obligation on the time to uncover faulty codes. One of many executives, Steve Nelson, known as it a “very clear reply” to the query. Nelson has since left the corporate.
For his or her half, 4 of the 5 CMS staffers on the decision mentioned in depositions that they didn’t bear in mind what was mentioned. Not like the corporate’s workforce, not one of the authorities officers took detailed notes.
“All I can inform you is I bear in mind feeling very uncomfortable within the assembly,” Rice mentioned in her 2022 deposition.
But Rice and one different CMS staffer mentioned they did recall reminding the executives that even with out the chart evaluate rule, the corporate was obligated to make a good-faith effort to invoice just for verified codes — or face attainable penalties underneath the False Claims Act. And CMS officers strengthened that view in follow-up emails, in line with courtroom filings.
DOJ known as the flap over the ill-fated regulation a “crimson herring” in a courtroom submitting and alleges that when UnitedHealth requested for the April 2014 assembly, it knew its chart evaluations had been underneath investigation for 2 years. As well as, the corporate was “grappling with a projected $500 million finances deficit,” in line with DOJ.
Knowledge Miners
Medicare Benefit plans defend chart evaluations towards criticism that they do little however artificially inflate the federal government’s prices.
“Chart evaluations are one in every of many instruments Medicare Benefit plans use to help sufferers, determine persistent situations, and forestall these situations from changing into extra critical,” mentioned Chris Bond, a spokesperson for AHIP, a medical insurance commerce group.
Whistleblowers have argued that the cottage industry of analytics companies and coders that sprang as much as conduct these evaluations pitched their providers as an enormous moneymaking train for well being plans — and little else.
“It was by no means reputable,” mentioned William Hanagami, a California legal professional who represented whistleblower James Swoben in a 2009 case that alleged chart evaluations improperly inflated Medicare funds. In a 2016 decision, the ninth Circuit Court docket of Appeals wrote that well being plans should train “due diligence” to make sure they submit correct knowledge.
Since then, different insurers have settled DOJ allegations that they billed Medicare for unconfirmed diagnoses stemming from chart evaluations. In July 2023, Martin’s Level Well being Plan, a Portland, Maine, insurer, paid $22,485,000 to settle whistleblower allegations that it improperly billed for situations starting from diabetes with issues to morbid weight problems. The plan denied any legal responsibility.
A December 2019 report by the Well being and Human Companies Inspector Normal discovered that 99% of chart evaluations added new medical diagnoses at a price to Medicare of an estimated $6.7 billion for 2017 alone.
