A decade ago, federal officials drafted a plan to discourage Medicare Advantage health insurers from overcharging the government by billions of dollars — only to abruptly back off amid an "uproar" from the industry, newly released court filings show. The Centers for Medicare & Medicaid Services published the draft regulation in January 2014. The rule would have required health plans, when examining patient's medical records, to identify overpayments by CMS and refund them to the government.
But in May 2014, CMS dropped the idea without any public explanation. Newly released court depositions show that agency officials repeatedly cited concern about pressure from the industry. The 2014 decision by CMS, and events related to it, are at the center of a multibillion-dollar Justice Department civil fraud case against UnitedHealth Group pending in federal court in Los Angeles.
The Justice Department alleges the giant health insurer cheated Medicare out of more than $2 billion by reviewing patients' records to find additional diagnoses, adding revenue while ignoring overcharges that might reduce bills. The company "buried its head in the sand and did nothing but keep the money," DOJ said in a court filing. Medicare pays health plans higher rates for sicker patients but requires that the plans bill only for conditions that are properly documented in a patient's medical records.
In a court filing, UnitedHealth Group denies wrongdoing and argues it shouldn't be penalized for "failing.