Supreme Court denies UnitedHealth Medicare Advantage appeal

The Supreme Court declined to hear UnitedHealthcare’s challenge to a federal regulation that makes Medicare Advantage insurers liable for False Claims Act lawsuits when they fail to return overpayments, justices announced Tuesday.

As such, an appeals court ruling that upheld the rule remains in force. Under federal law, Medicare Advantage carriers must return certain overpayments within 60 days of receipt. If they do not, they may be subject to civil damages and penalties. The rule applies to cases in which insurers send diagnostic codes to the Centers for Medicare and Medicaid Services that are not documented on patients’ medical charts.

The UnitedHealth Group subsidiary sued the CMS in 2016, alleging that the overpayment rule treats private Medicare Advantage insurers differently than traditional Medicare, which violates the “actuarial equivalence” standard between the two forms of coverage.

UnitedHealthcare will comply with CMS rules, a company spokesperson wrote in an email. “We are proud of the efforts we continue to make to bring greater clarity to the rules governing the growing and successful Medicare Advantage program,” the spokesperson wrote.

CMS didn’t immediately respond to an interview request.

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The overpayment rule, enacted in 2014, aims to curb upcoding and fraudulent billing. Medicare Advantage carriers exaggerating patient conditions led about $12 billion in excess payments in 2020, according to the Medicare Payment Advisory Commission.

UnitedHealthcare asked the Supreme Court to reconsider its case in February, after the U.S. Court of Appeals for the District of Columbia reversed a lower court’s decision to vacate the rule last year.

The company’s challenge attracted the support of a variety of Medicare Advantage stakeholders, including the trade group AHIP, the technology company agilon health and the U.S. Chamber of Commerce.

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