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 analyzing affected person’s medical data, to establish overpayments by CMS and refund them to the federal government.
However in Might 2014, CMS dropped the thought with none public rationalization. Newly launched courtroom depositions present that company officers repeatedly cited concern about strain 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 in opposition to UnitedHealth Group pending in federal courtroom in Los Angeles.
The Justice Division alleges the large well being insurer cheated Medicare out of greater than $2 billion by reviewing sufferers’ data to search out further diagnoses, including income whereas ignoring overcharges that 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 circumstances which might be 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 observe a rule that CMS thought of 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 battle 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 skilled.
Spokespeople for the Justice Division and CMS declined to remark for this text. In an electronic mail, UnitedHealth Group spokesperson Heather Soule mentioned the corporate’s “enterprise practices have all the time been clear, lawful and compliant with CMS rules.”
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 way in which, the trade has been the goal of dozens of whistleblower lawsuits, authorities audits, and different investigations alleging the well being plans typically exaggerate how sick sufferers are to rake in undeserved Medicare funds — together with by doing what are referred to as chart evaluations, meant to search out allegedly missed prognosis codes.
By 2013, CMS officers knew some Medicare well being plans have been hiring medical coding and analytics consultants to aggressively mine affected person recordsdata — 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 establish diagnoses that will set off further funds” to well being plans.
CMS officers backed down in Might 2014 due to “stakeholder concern and pushback,” Cheri Rice, then director of the CMS Medicare plan fee 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 overview proposal isn’t clear from courtroom filings to this point.
“The route that we acquired was that the rule, the ultimate rule, wanted to incorporate solely these provisions that had extensive, you recognize, widespread stakeholder assist,” Rice testified.
“So we didn’t transfer ahead then,” she mentioned. “Not as a result of we didn’t assume it was the suitable factor to do or the suitable coverage, however as a result of it had combined 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 College 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 purpose to face the wrath of very highly effective well being plans,” Fuse Brown mentioned.
“That’s extraordinarily alarming.”
Invalid Codes
The fraud case in opposition to 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 swimsuit in 2017.
DOJ alleges Medicare paid the insurer greater than $7.2 billion from 2009 by means of 2016 solely based mostly on chart evaluations; the corporate would have acquired $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 circumstances it had billed for weren’t supported by medical data however selected to pocket the overpayments. For example, the insurer billed Medicare almost $28,000 in 2011 to deal with a affected person for most cancers, congestive coronary heart failure, and different severe 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 workers members — together with a number of who’ve since departed authorities for jobs within the trade — in opposition to 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 workers 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 advised them the corporate had no obligation on the time to uncover misguided codes. One of many executives, Steve Nelson, referred to 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 keep in mind what was mentioned. In contrast to the corporate’s workforce, not one of the authorities officers took detailed notes.
“All I can let you know is I keep 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 overview 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 bolstered that view in follow-up emails, in response to courtroom filings.
DOJ referred to as the flap over the ill-fated regulation a “purple 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 funds deficit,” in response to DOJ.
Knowledge Miners
Medicare Benefit plans defend chart evaluations in opposition to criticism that they do little however artificially inflate the federal government’s prices.
“Chart evaluations are one among many instruments Medicare Benefit plans use to assist sufferers, establish persistent circumstances, and forestall these circumstances from changing into extra severe,” mentioned Chris Bond, a spokesperson for AHIP, a medical insurance commerce group.
Whistleblowers have argued that the cottage trade of analytics companies and coders that sprang as much as conduct these evaluations pitched their companies as an enormous moneymaking train for well being plans — and little else.
“It was by no means legit,” 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 resolution, 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 circumstances starting from diabetes with problems to morbid weight problems. The plan denied any legal responsibility.
A December 2019 report by the Well being and Human Companies Inspector Common discovered that 99% of chart evaluations added new medical diagnoses at a price to Medicare of an estimated $6.7 billion for 2017 alone.