Did we (the taxpayer) pay over $1B too much for Medicare payments to UHC?

Last week, the United States government filed a lawsuit against UnitedHealth Group for allegedly over-billing the Medicare system over $1 Billion.

An article published yesterday highlights some of the key components of the lawsuit.

• According to the complaint, UnitedHealth’s “chart review program” of its Medicare Advantage patients was, in reality, “strictly a one-sided revenue-generating program.”
• “United used the results of the chart reviews to only increase government payments (i.e., submit additional codes not reported by the providers) while in bad faith systemically ignoring other information from the chart reviews which would have led to decreased payments (i.e., information about diagnoses reported by providers to United and then submitted by United to Medicare which were not supported and validated by the medical records),” the complaint reads.
• UnitedHealth in 2011 had set up a quality control program as a remedy, and created a reserve with the intention of eventually returning the overbilled money to Medicare: $208 million for overpayments for 2012, and up to $180 million for 2013 and $175 million for 2014, according to the complaint.
• However, executives in April, 2014 took $250 million from the reserve to partially cover a shortfall in expected revenues for that second quarter. Afterward, the quality control program was shut down and the remaining reserve balance was returned to revenues -- even though the government had recently proposed a rule requiring insurers to “look both ways” when checking the accuracy of their diagnosis codes in the Medicare program, according to the complaint.

If these allegations are accurate (or directionally accurate), this is very concerning considering the Medicare program continues to struggle to remain financially stable.  As documented in the Medicare Trustees Report from 2016. the Medicare Hospital Insurance fund is estimated to be depleted by 2028 if no changes are made to the Medicare system.  For a $600B+/year Medicare program, $1B in potential fraud would not significantly move the needle, but it's still potentially $1B paid by taxpayers that should not have been paid.

I suspect the case could take several years to process, but I am looking forward to hearing the outcome, and hope this sends a message to all involved in the Medicare system to do things correctly going forward.