Sarah Markley  |  August 31, 2016

Category: Consumer News

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Medicare-Fraud-WhistleblowerThree major insurance companies, Aetna, UnitedHealthcare, and WellPoint, must face a Medicare Advantage whistleblower lawsuit after all.

Whistleblower James Swoben filed a complaint that these major insurers manipulated risk adjustment payments that offset the costs of sicker Medicare Advantage beneficiaries.

He claimed that Aetna, UnitedHealthcare and WellPoint all turned a blind eye to faulty diagnoses in order to reap bigger Medicare Advantage payments from the government.

Swoben’s case claims that when insurers audited diagnosis data, overlooked diagnoses could be added but they did not delete improper diagnoses. Basically, Swoben alleges, they conducted audits to only include errors that were favorable to the insurers.

Aetna, UnitedHealthcare and WellPoint may have thought they avoided this Medicare Advantage whistleblower lawsuit when a district judge recently refused to let Swoben amend his complaint. The district court stated that his amended complaint was too vague.

Instead of identifying specific examples of auditing errors, Swoben’s claim outlined a scheme that strongly indicates false claims were presented. The district court asserted that Swoben improperly lumped the three insurers together with blanket allegations.

Medicare Advantage Whistleblower Lawsuit Upheld by Ninth Circuit

The Ninth Circuit, however, recently published an opinion stating that the District Court was in error and ruled against the court.

In the published opinion about this Medicare Advantage whistleblower lawsuit, the Ninth Circuit found the district judge in error in refusing to let Swoben amend his complaint. They faulted the district court for finding that the amended complaint would be too vague.

The decision said, “Swoben, therefore, need not identify specific false [risk adjustment] certifications.”

Regarding the district court’s assertions that Swoben improperly lumped the insurers together, the Ninth Circuit called that approach acceptable when “collective allegations are used to describe the actions of multiple defendants who are alleged to have engaged in precisely the same conduct.”

The Ninth Circuit also supported Swoben, which is significant. Manipulation of risk adjustment data is a newer theory and the Circuit’s ruling is the first of its kind. One of the attorneys for the plaintiff said that this ruling is the first he’s heard of that “gets into the nuts and bolts of risk adjustment fraud.”

The published opinion of the Ninth Circuit also stated, “The defendants’ attempts to portray themselves as the passive victims of their providers’ errors wholly misstates Swoben’s theory of the case, which focuses on the defendants’ own conduct in allegedly conceiving, directing and conducting retrospective reviews designed to identify only favorable reporting errors.”

In this Medicare Advantage whistleblower lawsuit, the insurers claimed that they were not obligated to double-check the diagnoses to verify their accuracy. However, the Ninth Circuit disagreed. They wrote that Aetna, UnitedHealthcare and WellPoint have always had such an obligation.

The plaintiff, Swoben, once worked for SCAN Health Plan in California. In 2012 SCAN paid almost $4 million to exit the case and another $300 million to resolve separate Medicaid allegations.

The Medicare Advantage Whistleblower Lawsuit is U.S. ex rel. Swoben v. United Healthcare Insurance Co. et al., Case No.: 13-56746, in the U.S. Court of Appeals for the Ninth Circuit.

In general, whistleblower and qui tam lawsuits are filed individually by each plaintiff and are not class actions. Whistleblowers can only join this investigation if they are reporting fraud against the government, meaning that the government must be the victim, and that the alleged fraud should be a substantial loss of money.

Do YOU have a legal claim? Fill out the form on this page now for a free, immediate, and confidential case evaluation. The attorneys who work with Top Class Actions will contact you if you qualify to let you know if an individual qui tam lawsuit or whistleblower class action lawsuit is best for you. Hurry — statutes of limitations may apply.

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If you believe that you have witnessed fraud committed against the government, you may have a legal claim. Whistleblowers can only join this investigation if they are reporting fraud against the government, meaning that the government must be the victim, and that the alleged fraud should be a substantial loss of money.

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