By Fred Schulte July
28, 2017
United
Healthcare Services Inc., which runs the nation’s largest private Medicare
Advantage insurance plan, concealed hundreds of complaints of enrollment fraud
and other misconduct from federal officials as part of a scheme to collect
bonus payments it didn’t deserve, a newly unsealed whistleblower lawsuit
alleges.
The
suit, filed by United Healthcare sales agents in Wisconsin, accuses the giant
insurer of keeping a “dual set of books” to hide serious complaints about its
services and of being “intentionally ineffective” at investigating misconduct
by its sales staff. A federal judge unsealed the lawsuit, first filed in
October 2016, on Tuesday.
The
company knew of accusations that at least one sales agent forged signatures on
enrollment forms and had been the subject of dozens of other misconduct
complaints, according to the suit. In another case, a sales agent allegedly
engaged in a “brazen kickback scheme” in which she promised iPads to people who
agreed to sign up and stay with the health plan for six months, according to
the suit.
Though
it fired the female sales agent, United Healthcare concluded the kickback
allegations against her were “inconclusive” and did not report the incident to
the Centers for Medicare & Medicaid Services, according to the suit.
Asked
for comment on the allegations in the suit, United Healthcare spokesman Matt
Burns said: “We reject them.”
Medicare
serves about 56 million people, both people with disabilities and those 65 and
older. About 19 million have chosen to enroll in Medicare Advantage plans as an
alternative to standard Medicare. United Healthcare is the nation’s biggest
operator, covering about 3.6 million patients last year.
The
whistleblowers accuse United Healthcare of hiding misconduct complaints from
federal officials to avoid jeopardizing its high rankings on government quality
scales. These rankings are used both as a marketing tool to entice members and
as a way for the government to pay bonuses to high-quality plans.
Medicare
paid United Healthcare $1.4 billion in bonuses in fiscal 2016 based upon their
high quality ratings, compared with $564 million in 2015, according to the
suit. CMS relies on the health plans to report problems and does not verify the
accuracy of these reports before issuing any bonus payments.
The
suit alleges the bonuses were “fraudulently obtained” because the company
concealed the true extent of complaints. In March 2016, for instance, the
company advised CMS only of 257 serious complaints, or about a third of the 771
actually logged, according to the suit.
The
suit was filed by James Mlaker, of Milwaukee, a sales agent with the insurance
plan in Wisconsin, and David Jurczyk, a resident of Waterford, Wis., a sales
manager with the company.
The
suit says Jurczyk had access to “dual” complaint databases, described as “the
accurate one with a complete list of complaints and more details of the
offenses and the fraudulent, truncated one provided to CMS.”
Jurczyk
“has direct, personal knowledge of dozens of cases in Wisconsin alone in which
customer complaints raising serious issues were routinely determined and
falsely documented as either “inconclusive” or “unsubstantiated” by the
company, according to the suit. Overall, about 84 percent of complaints
alleging major infractions, such as forging signatures on enrollment forms,
were determined to be inconclusive or unsubstantiated, according to the suit.
According
to Mlaker, one sales agent faced little disciplinary action even after
allegedly forging a customer’s signature on an enrollment form. The customer
was “shocked” to learn that the agent had enrolled him because he had told the
agent he was “not interested and did not want to enroll,” according to the
complaint.
As
a result, according to the suit, CMS officials never learned of these customer
complaints.
The
two men said that in early 2013 they began noticing that investigations of
serious customer complaints that previously would have been completed “swiftly”
instead “were drawn out; little actual inquiry was made, or even worse, known
facts were ignored and discounted to falsify findings,” according to the suit.
Complaints
also brought “much fewer and less serious corrective or disciplinary actions,”
according to the suit. According to the suit, United Healthcare took steps to
encourage any members with complaints to report them directly to the company
rather than to complain to CMS.
The
unsealing of the Wisconsin cases comes as United Healthcare and other Medicare
Advantage plans are facing numerous cases brought under the Federal False
Claims Act. At least a half-dozen of the whistleblower suits have surfaced
since 2014.
The
law allows private citizens to bring actions to recover damages on behalf of
the federal government and retain a share. The Justice Department elected not
to take over the Wisconsin case, which could limit the amount of money, if any,
recovered. United Healthcare spokesman Burns said the company agreed with that
decision.
In
May, the Justice Department accused United
Healthcare of overcharging the federal government by more than $1 billion by
improperly jacking up risk scores over the course of a decade.
KHN’s
coverage related to aging & improving care of older adults is supported
by The John A. Hartford Foundation.
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