The federal government has joined a whistleblower lawsuit against UnitedHealth over claims of Medicare billing fraud. The False Claims Act lawsuit alleges that UnitedHealth Group Inc. misrepresented their members’ health conditions, making them appear sicker than they actually were in order to overbill Medicare, costing the government hundreds of millions of dollars.

In addition to naming UnitedHealth, a dozen more health plans were also mentioned, but the federal government chose only to join in on claims against UnitedHealth and WellMed Management Inc., a company that was an UnitedHealth acquisition back in 2011. The U.S. Department of Justice did not join in on claims against Blue Cross Blue Shield, Aetna Inc., and Humana Inc.

The whistleblower in the case is Benjamin Poehling, United Healthcare Medicare and Retirement’s director of finance. Poehling filed his amended complaint in the False Claims Act lawsuit in 2011 and was unsealed in mid-February after the DOJ completed the investigation of the claims.

“The federal government’s decision to join this case after a five-year investigation demonstrates the gravity of these allegations,” the whistleblower’s lawyer Mary A. Inman stated. According to Inman, this is the first whistleblower lawsuit brought by a director-level employee against a large health insurance company alleging Medicare billing fraud linked to risk adjustment payments sent to the Centers for Medicare and Medicaid Services (CMS).

In Medicare insurance plans, risk adjustment payments are paid monthly to the insurer that calculates a monthly rate for each Medicare beneficiary who is enrolled in the managed care plan administered by a private insurer. Health insurance plans are expected to use the funds from the monthly income in order to pay physicians and other healthcare first for the care provided to those patients.

Insurance companies can receive a risk adjustment for eligible plan members who have had a face-to-face visit with a qualified health provider during the previous 12 months and who have records of a qualified ailment during the documented visit.

The whistleblower alleged that United Health engaged in a process known as “upcoding” the risk adjustment claims by fraudulently documenting diagnoses that members didn’t have or did not receive treatment for during the eligible period, with some documentation stating that members were treated for conditions that were more serious than what the members actually suffered from.

After CMS received this documentation from UnitedHealth, it would pay the health plan insurers an excess amount based on the false diagnoses or treatment records. Insurance companies allegedly pocketed the additional monies, the Medicare billing fraud lawsuit alleged.

The whistleblower has worked with UnitedHealth since 2002 and stated that he raised his concerns to senior executives, but the company didn’t intervene to address the issues.

Another lawyer for Poehling said in a statement, “Through the scheme outlined in the suit, UnitedHealth has allegedly fraudulently claimed and retained hundreds of millions of dollars. That money would have been far better used to provide care for our nation’s seniors rather than simply patting UnitedHealth’s bottom line.”

The Medicare Billing Fraud Whistleblower Lawsuit is United States of America v. UnitedHealth Group Inc., et al., Case No. 08697, the U.S. District Court for the Central District of California.