Whistleblowers Allege the Suppression of Complaints at United Healthcare

Given the dramatic rise in popularity of Medicare Advantage insurance plans among America’s seniors, it is not surprising that we now are also seeing a corresponding rise in the types of fraud being alleged by whistleblower insiders against Medicare Advantage plans. In February of this year, the Department of Justice joined a whistleblower’s case against UnitedHealth Group for allegedly improperly increasing patients’ risk scores and making patients appear sicker than they are in order to artificially inflate their capitation rates. Last month, the Government settled for $32.5 million a whistleblower-initiated case against two mid-sized Medicare Advantage plans in Tampa, Florida charged with risk adjustment fraud and also with fraudulently expanding their service area into multiple counties without having a sufficient provider network in place. The whistleblower-initiated complaint against UnitedHealth unsealed on July 25 is the latest variety of fraud being alleged against a major Medicare Advantage plan.

On July 25, a federal judge in Wisconsin unsealed a whistleblower lawsuit against United Health Services, Inc., one of the nation’s largest Medicare Advantage plans. The lawsuit, which was filed by two sales agents in October 2016, accuses United of hiding serious complaints brought by patients against the health plan in order to improperly boost its performance measures and receive undeserved bonuses from CMS.

In 2012, following the passage of the Affordable Care Act, CMS began paying performance bonuses to Medicare Advantage Plans who achieved a rating of 3 or above on a 5-star rating system. One of the measures on which CMS judges MA plans is based on the patients’ experience, including the number and type of complaints patients bring against the plan. In this latest case, the two whistleblower sales agents accuse United of hiding from CMS patients’ complaints of misconduct in order to continue to maintain its high Star Ratings and receive the performance bonuses CMS provides to high performing plans.

Specifically, the whistleblowers accuse United of keeping two sets of books — one for internal purposes that accurately recorded the true number of patient complaints and a second one to show to CMS in the event of an audit in which many serious complaints are removed and therefore significantly understated. According to the whistleblowers, the practice of hiding many of the serious patient complaints coincided with a change in organizational structure in which these functions were being overseen by a different division at United — its Medicare and Retirement Division.

The stakes for maintaining 3 to 5 level Star Ratings are very high. According to the complaint, United received $564 million in performance bonuses from CMS in 2015 and $1.4 billion in 2016 — a 300% increase. The performance data underlying the Star ratings are self-reported, and therefore rely on an honor system. With a total of 47 measures on which the Star Rating is based, there are lots of opportunities for unscrupulous Medicare Advantage plans to skew their ratings. We expect to see more whistleblower cases alleging Star rating manipulation in the future. Think of STARS as CMS’s version of a Yelp review, substituting healthcare services for restaurants. The Wisconsin whistleblowers accuse United of burying the worst customer reviews and undeservedly getting a deceptively glowing review of their health care.

Mary Inman is a partner in the London office of Constantine Cannon, where she specializes in representing whistleblowers from the U.S., Europe and worldwide under the various American whistleblower bounty programs, including the False Claims Act and the SEC, CFTC, IRS and DOT whistleblower programs.