As previously reported, UnitedHealthcare Insurance Company (United) is challenging CMS’s Medicare C/D Overpayment Rule as it applies to Medicare Advantage (MA) organizations. HHS sought to stay United’s lawsuit while it pursues the following two pending FCA cases against the insurer: (1) United States ex rel. Swoben v. Secure Horizons, No. 09-5013 (C.D. Cal) (Swoben), and (2) United States ex rel. Poehling v. UnitedHealth Group, 11-cv-258 (W.D.N.Y) (Poehling). On June 14, 2017, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia issued an opinion and order (Order) denying the government’s motion to stay United’s lawsuit challenging the 2014 Overpayment Rule. See UnitedHealthcare Insurance Company v. Price, No. 16-cv-00157 (D.D.C. June 14, 2017).
The Affordable Care Act requires that if a “person” receives a Medicare or Medicaid overpayment, the person must report and return the overpayment within 60 days of its identification or face potential FCA liability. CMS issued its final Medicare Parts C/D Overpayment Rule in May 2014. United argues “that the 2014 Overpayment Rule, which [United] says imposes a stricter standard on MA providers than on CMS itself when paying Medicare benefits, is inconsistent with the Medicare statute’s requirement that CMS ‘ensure actuarial equivalence’ between traditional Medicare and MA programs and thus violates the [Administrative Procedure Act].”
As outlined in the court’s Order, both pending FCA cases allege that United “knowingly misreported or knowingly caused other parties to misreport overpayments as part of a scheme to inflate its Medicare reimbursements.” However, the court’s Order noted that “[a]ll parties agree that the allegedly fraudulent conduct in Poehling and Swoben predates the 2014 Overpayment Rule, and that the Rule is not at issue in either FCA [c]ase.”
In denying HHS’s motion to stay, the court reasoned, in part, that this “case is limited to whether CMS acted beyond its authority when promulgating its 2014 Overpayment Rule. It does not concern the actions of United in any way, and any analysis by the Court would be limited to the administrative record behind the 2014 Overpayment Rule and the statute . . .” The court granted the government additional time (until July 14) to answer United’s Complaint.
