A Whistle-Blower Tells of Health Insurers Bilking Medicare

from the first interview since his allegations were made public, the whistle-blower, Benjamin Poehling of Bloomington, Minn., described in detail how his company in addition to others like the item — in his view — gamed the system: Finance directors like him monitored projects of which UnitedHealth had designed to make patients look sicker than they were, by scouring patients’ health records electronically in addition to finding ways to goose the diagnosis codes.

The sicker the patient, the more UnitedHealth was paid by Medicare Advantage — in addition to the bigger the bonuses people earned, including Mr. Poehling.

In February, a federal judge unsealed the lawsuit of which Mr. Poehling filed against UnitedHealth in addition to 14 different companies involved in Medicare Advantage.

“They’ve set up a perfect scheme here,” Mr. Poehling said in an interview. “the item was rigged so there was no way they could lose.”

A spokesman for UnitedHealth, Matthew A. Burns, said the company rejected Mr. Poehling’s allegations in addition to might contest them vigorously.

How Medicare Payments Work

The traditional Medicare program reimburses doctors directly for procedures they perform — although of which can promote unnecessary treatments in addition to inflate costs. So Medicare Advantage was set up differently: The government contracts with for-profit insurers to manage health care for the elderly, in addition to pays insurers a yearly fee for each member they enroll. of which fee is usually higher for patients recently treated for certain conditions, creating an incentive for Medicare Advantage insurers to search for diagnoses of illness in their patients, even where none may exist.




CENTERS FOR

MEDICARE in addition to

MEDICAID SERVICES

1. Traditional Medicare members pay a monthly premium to the Centers for Medicare in addition to Medicaid Services (C.M.S.), whether or not they visit a doctor. C.M.S. also receives funding by U.S. taxpayers.

2. If members see a doctor, the doctor sends a copy of their medical report to C.M.S., to get paid.

3. C.M.S. pays the doctor. Traditional Medicare compensates doctors according to the procedures they perform — lab tests, scans, operations, etc.

CENTERS FOR

MEDICARE in addition to

MEDICAID SERVICES

1. Medicare Advantage members also pay a monthly premium to C.M.S., in addition to often a separate premium to a private insurance company.

2. If members see a doctor, the doctor sends a copy of the medical report to the private insurer, who then pays the doctor.

3. C.M.S. pays the private insurer a base rate for each member. If the private insurer tells C.M.S. of which the member required treatment for certain conditions, C.M.S. pays the insurer more.

1. Traditional Medicare members pay a monthly premium to the Centers for Medicare in addition to Medicaid Services (C.M.S.), whether or not they visit a doctor. C.M.S. also receives funding by U.S. taxpayers.

2. If members see a doctor, the doctor sends a copy of their medical report to C.M.S., to get paid.

3. C.M.S. pays the doctor. Traditional Medicare compensates doctors according to the procedures they perform — lab tests, scans, operations, etc.

CENTERS FOR

MEDICARE in addition to

MEDICAID SERVICES

1. Medicare Advantage members also pay a monthly premium to C.M.S., in addition to often a separate premium to a private insurance company.

2. If members see a doctor, the doctor sends a copy of the medical report to the private insurer, who then pays the doctor.

3. C.M.S. pays the private insurer a base rate for each member. If the private insurer tells C.M.S. of which the member required treatment for certain conditions, C.M.S. pays the insurer more.

CENTERS FOR

MEDICARE in addition to

MEDICAID SERVICES


“We are confident our company in addition to our employees complied with the government’s Medicare Advantage program rules, in addition to we have been transparent with C.M.S. about our approach under its murky policies,” he said, referring to the Centers for Medicare in addition to Medicaid Services, which administers Medicare Advantage.

Mr. Burns also said Mr. Poehling’s complaints in addition to similar ones held UnitedHealth in addition to different Medicare Advantage participants to higher standards than the ones used by the original Medicare program.

Mr. Poehling’s suit, filed under the False Claims Act, seeks to recover excess payments, in addition to big penalties, for the Centers for Medicare in addition to Medicaid Services. (Mr. Poehling might earn a percentage of any money recovered.) The amounts in question industrywide are mind-boggling: Some analysts estimate improper Medicare Advantage payments at $10 billion a year or more.

At the heart of the dispute: The government pays insurers extra to enroll people with more serious medical problems, to discourage them by cherry-picking healthy people for their Medicare Advantage plans. The higher payments are determined by a complicated risk scoring system, which has nothing to do with the treatments people get by their doctors; rather, the item is usually all about diagnoses.

Diabetes, for example, can raise risk scores by varying amounts, depending on a patient’s complications. So UnitedHealth gave people with diabetes intensive scrutiny, to see if they had any different conditions of which the diabetes might have caused.

As Mr. Poehling’s lawyer, Mary Inman, described the item, the government might pay UnitedHealth $9,580 a year for enrolling a 76-year-old woman with diabetes in addition to kidney failure, for instance, although if the company claimed of which her diabetes had actually caused her kidney failure, the payment rose to $12,902 — a different $3,322. Ms. Inman is usually with the law firm of Constantine Cannon in San Francisco.

Mr. Poehling said the data-mining projects of which he had monitored could raise the government’s payments to UnitedHealth by nearly $3,000 per brand-new diagnosis found. The company, he said, did not bother looking for conditions like high blood pressure, which, though dangerous, do not raise risk scores.

He included in his complaint an email message by Jerry J. Knutson, the chief financial officer of his division, in which Mr. Knutson urged Mr. Poehling’s team “to actually go after the potential risk scoring you have consistently indicated is usually out there.”

“You mentioned vasculatory disease opportunities, screening opportunities, etc., with huge $ opportunities,” Mr. Knutson wrote. “Let’s turn on the gas!”

There were bonuses when Mr. Poehling in addition to his team hit their revenue targets, Mr. Poehling said, although no bonuses for better health outcomes or for more accurate patients’ charts.

The cost of Risk

The Medicare Advantage program pays insurance companies a yearly fee for each person they enroll. in addition to the item pays more for people who are sick, to keep insurers by rejecting them because their care will cost more. The practice, called “risk adjustment,” gives insurers an incentive to tell the government of which people are sicker than they may, in fact, be.




MEDICARE ADVANTAGE PROGRAM

ADDITIONAL PAYMENT TO INSURER FOR SELECTED CONDITIONS

Diabetes without complications

Breast, prostate in addition to different

cancers in addition to tumors

Diabetes with acute complications

Major depressive, bipolar in addition to

paranoid disorders

Lung in addition to different severe cancers

Metastatic cancer in addition to acute leukemia


“You or I or the average person is usually probably appalled by This kind of,” Mr. Poehling said. “although the scheme here was not about delivering better care to members — the thing you might expect by a health care company. the item was about increasing the bottom line.”

He went to work for UnitedHealth in 2002, filed his lawsuit in 2011 in addition to left the company at the end of 2012, while the case was still under seal.

Mr. Poehling’s allegations, if true, could help explain why insurers are staying from the Medicare Advantage program even as they pull out of the Affordable Care Act exchanges in some states: Medicare Advantage offers a way to get extra money by the federal government.

When a whistle-blower succeeds in recovering money for the government, the False Claims Act calls for him or her to receive a percentage. Many whistle-blower cases fail to reach of which point, although when the Justice Department joins a case, in general, the odds of a recovery go up.

Already the Justice Department has declined to intervene in some smaller whistle-blower cases with similar allegations. although in March, the item did say the item might join a whistle-blower suit filed by James Swoben, a former data manager of SCAN Health Plan, accusing UnitedHealth in addition to several different companies of cheating Medicare Advantage by looking improperly for ways to raise people’s risk scores.

In 2016, the United States Court of Appeals for the Ninth Circuit vacated a lower court’s decision to throw out Mr. Swoben’s case. After reviewing the allegations, Judge Raymond C. Fisher wrote, “We do not see how a Medicare Advantage contractor who has engaged in such conduct can in not bad faith certify” of which the diagnosis codes the item reports to the Centers for Medicare in addition to Medicaid Services “are accurate, complete in addition to truthful.”

of which ruling did not decide Mr. Swoben’s case, although merely sent the item back to a district court to be adjudicated. His case in addition to Mr. Poehling’s case are both today being handled by the United States District Court in Los Angeles.

Meanwhile, UnitedHealth has sued the Centers for Medicare in addition to Medicaid Services, seeking to vacate a 2014 rule of which requires insurers to make sure the diagnoses they report to the government are borne out by what is usually in people’s charts, in addition to imposing penalties for overstatements. UnitedHealth argues of which This kind of rule unlawfully departs by the program’s statutory mandates requiring “actuarial equivalence” with the traditional Medicare program.

“of which case could provide further clarity on the program rules,” Mr. Burns of UnitedHealth said. He added of which the government seemed to be trying to delay to ensure the two whistle-blower lawsuits could go first.

The Justice Department has said the item is usually investigating four different Medicare Advantage insurers: Aetna, Humana, Health Net in addition to Cigna’s Bravo Health. of which suggests of which there are more whistle-blowers from the wings, potentially snarling more insurers in litigation in addition to ultimately forcing a rethinking of the entire program.

Photo

A UnitedHealth branch in Flushing, N.Y. A company spokesman said, “We are confident our company in addition to our employees complied with the government’s Medicare Advantage program rules.”

Credit
Michael Nagle/Bloomberg

“C.M.S. could do a lot to change the rules so the item’s not so easy to get away with This kind of stuff,” said Timothy Layton, an assistant professor at Harvard Medical School who researches insurer behavior in health-insurance markets. He is usually not involved in Mr. Poehling’s lawsuit.

“the item’s a huge waste of money,” Professor Layton said of the quest for higher risk scores. “What the insurers are doing is usually not socially valuable at all.”

The Centers for Medicare in addition to Medicaid Services declined to comment with This kind of article.

Auditors in addition to analysts have warned for at least a decade of which Medicare Advantage has been vulnerable to cheating since risk scoring was phased in, by 2004 to 2008. The inspector general of the Department of Health in addition to Human Services, where the centers reside, audited a tiny sample of Medicare Advantage plans early on in addition to found overpayments of up to $650 million in 2007. the item predicted even more in 2008, although then came budget cuts in addition to those audits stopped.

The Government Accountability Office reported last year of which the Centers for Medicare in addition to Medicaid Services had identified $14.1 billion of overpayments to insurers in 2013 in addition to did not have a clear plan for recovering the money. the item also faulted the agency’s auditing methods.

“I recall a feeling of frustration verging on outrage,” said Ted Doolittle, the deputy director of the Medicare in addition to Medicaid agency’s Center for Program Integrity at of which time.

In 2014 the Center for Public Integrity, a nonprofit research group, analyzed the only available Medicare Advantage data in addition to reported of which insurers had reaped about $70 billion in overpayments by 2008 to 2013.

Fred Schulte, who led the center’s research in addition to today works for Kaiser Health News, also sued the Centers for Medicare in addition to Medicaid Services to get more data. In January, he reported getting confidential documents showing of which the agency had tried to recover $128 million of overpayments to a few insurers in 2007 although, “under intense pressure by the health insurance industry,” settled for just $3.4 million in 2012.

Last month, Senator Charles E. Grassley wrote to the agency’s administrator, Seema Verma, complaining of which the item had trumpeted the $3.4 million recovery to him as a sign of not bad fiscal oversight, without mentioning of which the item could have gone after $128 million.

“The difference between the assessment in addition to the actual recovery is usually striking in addition to demands an explanation,” Mr. Grassley, an Iowa Republican, wrote.

As lawmakers in addition to others try to get their arms around the issue, few insurance insiders have come forward with firsthand accounts. Mr. Poehling said he had done so reluctantly.

“I came to the point where I just couldn’t participate in what they were asking me to do anymore,” he said.

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