The DOJ’s recent complaint-in-intervention in US ex rel. Poehling v. United Health Group—one of two qui tam cases against United Health currently pending in the Central District of California—emphasizes the government’s view that, in order to avoid FCA liability based on allegedly inflated risk adjustment scores for Medicare Advantage members, health plans must follow up on any information they know or have reason to know indicating that providers are submitting or have submitted invalid codes to the health plan.

In its complaint, DOJ asserts claims against the defendants under each of the false claims, false statements, and reverse false claims provisions of the FCA based essentially on four factual components:

• Defendants knew they were required to take steps to identify and delete invalid codes submitted to them in order to ensure what was submitted to CMS was true and accurate.
• Defendants knew or deliberately avoided obtaining knowledge that certain diagnosis codes or categories of diagnosis codes submitted to the plans by providers were invalid.
• Defendants failed to follow up on and prevent the submission of or submit deletions for these invalid codes and categories of codes.
• United Health made attestations to CMS each year as to the truth and accuracy of the data submitted that it knew were false at the time they were made or which were made in deliberate ignorance or reckless disregard of their falsity based on the information available to them at the time.

Specifically, with regard to the first component, the complaint alleges that United Health knew or should have known that, by at least 2008, it was required to identify and delete invalid provider-reported diagnoses and that, in 2010, United Health had acknowledged that it should look at the results of its blind chart reviews to identify codes for deletion and not just addition. To a significant extent, the allegations pleading knowledge in the complaint are derived from senior management’s consideration of data validation measures for possible implementation and disclosures to senior management of government expectations about data validation.

Regarding the second and third components, the complaint alleges specific facts based on three separate sets of United Health business processes:

• The Chart Review Program: DOJ specifically alleges that all codes since 2010 (the year United Health acknowledged that its reviews should look both ways) that would have been deleted if United Health had used data from its blind reviews to identify deletions were invalid. The complaint further quantifies damages based on the impact of these codes.
• Claims Verification Program: DOJ alleges that the Claims Verification Program—which was implemented in 2010 to “look both ways”—showed further knowledge on the part of United Health regarding the accuracy problems with provider submitted codes. According to DOJ, the Program was improperly structured to try to save codes by requiring re-review of codes found to be unsupported by the initial coder and reflected actual knowledge on the part of United Health of specific invalid codes which it failed to delete. The complaint further quantifies damages based on the impact of these codes that United Health identified as invalid but failed to delete.
• Provider Focused Validation Programs (Internal Data Validation and Risk Adjustment Coding and Compliance Review): DOJ alleges that these Programs, which were put in place to safeguard against improper diagnosis codes submitted by United Health’s financially-incentivized providers by identifying providers who were outliers in the submission of certain codes and taking steps to validate their codes, amounted to further knowledge on the part of United Health that there was a high inaccuracy rate in provider-submitted codes and that the Programs were structured in such a way as to avoid deleting erroneous codes in spite of United Health’s knowledge.

Regarding the attestations, DOJ alleges that the attestations included the language that they were “based on facts reasonably available or made available to” the signor and alleges that the facts available to the persons signing the attestations included the negative results of its medical record reviews.

This complaint follows the DOJ’s intervention in this case in February (see our earlier post, dated February 27, 2017 and its complaint in intervention in the parallel case against United Health of US ex rel. Swoben v. Secure Horizons (see our earlier post, dated May 10, 2017).

In response to the Swoben and Poehling complaints, the government appears to expect that United Health might advance the same “actuarial equivalence” arguments made in United Health’s challenge to CMS’ 60-day repayment rule in separate litigation with CMS pending in the United States District Court for the District of Columbia.  In its challenge to the 60-day repayment rule, United Health has argued that by defining an overpayment under that rule to include any payment based on a risk adjustment diagnosis not supported by the medical record, CMS has violated the requirement under Medicare that CMS ensure “actuarial equivalence” between traditional Medicare and Medicare Advantage plans because CMS created the risk adjustment system using diagnosis data from its fee-for-service program, which is not subject to validation with a supporting medical record.  CMS moved to stay the challenge to the 60-day repayment rule pending the outcome of Swoben and Poehling, but the district court denied that motion.  Responsive pleadings in this case are due July 14, 2017.

Defendants’ responsive pleadings in the Swoben and Poehling cases are due July 14, 2017 and July 17, 2017, respectively.