New DC Circuit Ruling Impacts Medicare Advantage Plans and FCA Enforcement
In a unanimous opinion, the DC Circuit reversed a successful challenge brought by UnitedHealth (United) and other Medicare Advantage insurers to vacate a Medicare Advantage Overpayment Rule. The Overpayment Rule requires that an insurer must make a refund to the Centers for Medicare & Medicaid Services (CMS) within 60 days if it learns that a diagnosis it submitted for payment lacks support in the beneficiary’s medical record. United argued that the Overpayment Rule is subject to and in violation of the principle of “actuarial equivalence” that Medicare Advantage insurers receive comparable reimbursement as under traditional Medicare. United asserted that the actuarial equivalence rule “prevents CMS from recovering overpayments under the Rule unless CMS first shows that the rate of payment errors to healthcare providers in traditional, fee-for-service Medicare is lower than the rate of payment errors to the Medicare Advantage insurer.” The DC Circuit rejected that argument and held that “nothing in the Medicare statute’s text, structure or logic applies actuarial equivalence to its separate overpayment-refund obligation, and thus the overpayment rule does not violate actuarial equivalence.”
This decision has important implications for the government’s enforcement of the False Claims Act (“FCA”) for claims based on a knowing failure to return overpayments. The Court noted specifically that “concern about costly errors in the data reported by Medicare Advantage insurers” guided Congress in the Patient Protection and Affordable Care Act to require Medicare Advantage insurers to report and return any overpayment that they receive from CMS within sixty days of identifying the overpayment, and that failure to return a known overpayment violates the FCA. By rejecting the notion that CMS’s recoupment of overpayments violates the Medicare Advantage actuarial equivalence rules, the Court foreclosed that defense by Medicare Advantage insurers charged with FCA liability, thereby bolstering the government’s ability to enforce the FCA in overpayment cases.
The case is UnitedHealthcare Insurance Co. et al. v. Becerra et al., case number 18-5326, in the U.S. Court of Appeals for the District of Columbia Circuit.
Read the Law360 article here.
Ohio Resident Pleads Guilty to $300 Million Darknet-Based Bitcoin Conspiracy
An Ohio resident pleaded guilty to a money-laundering conspiracy arising from his operation of Helix, a Darknet-based cryptocurrency laundering service, also called a bitcoin “mixer” or “tumbler,” which allowed customers to conceal the source or owner of the bitcoin when sending it to designated recipients. Bitcoin mixers like Helix help criminals launder money received through drug trafficking and other illegal activities by concealing the source of the illicit funds.
The defendant admitted that, between 2014 and 2017, Helix partnered with Darknet markets such as AlphaBay, Evolution, and Cloud 9 to facilitate their customers’ money laundering. Helix moved over 350,000 bitcoin, valued at over $300 million at the time of the transactions, on behalf of its customers. The defendant further admitted that he conspired with Darknet vendors and marketplace administrators to launder bitcoins generated through illegal activities on those Darknet marketplaces.
As part of his plea, the defendant will forfeit more than 4,400 bitcoin, valued today at more than $200 million. At sentencing, the defendant faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, and mandatory restitution. The investigation was coordinated with the Financial Crimes Enforcement Network, which assessed a $60 million civil monetary penalty against the defendant in a companion case.
Read the press release here.
Optician Business Settles False Claims Act Allegations For $678K
L.A. Vision LLC and its owner entered into a civil settlement agreement with the federal and state governments to pay $678,901.21 to resolve allegations that they violated the False Claims Act and its state counterparts.
The government alleged that beginning in January 2014, L.A. Vision and its licensed optician owner submitted false claims to the government for optical goods and services that were not medically necessary. For instance, the government alleged that every time L.A. Vision billed Connecticut Medicaid for a pair of eyeglasses, they also submitted a claim to Medicaid for “miscellaneous vision services or items.” L.A. Vision submitted those claims using a procedure code that can only be used for medically necessary vision services but allegedly did not provide any services or items that were medically necessary that would support using that code. The government also alleged that young Medicaid beneficiaries were encouraged to choose up to three pairs of eyeglasses at a time, despite that Medicaid does not cover spare pairs of eyeglasses because they are not considered medically necessary. Nevertheless, L.A. Vision knowingly submitted claims to Medicaid for multiple pairs of eyeglasses, in violation of the False Claims Act.
In addition to the settlement payment of $678,901.21 to the federal and state governments, L.A. Vision and its owner have also entered into a three-year billing Integrity Agreement with the U.S. Department of Health and Human Services to ensure future compliance with federal healthcare program rules.
Read the press release here.