March 17, 2017 / 5:16 PM / 3 years ago

U.S. investigates four insurers over Medicare payments

(Reuters) - The U.S. Justice Department has disclosed an investigation into four health insurers after a lawsuit accused them of defrauding Medicare by claiming patients were treated for conditions they did not have or received no treatment for.

FILE PHOTO - A trader points up at a display on the floor of the New York Stock Exchange August 20, 2012. REUTERS/Brendan McDermid/File Photo

The probe of Health Net Inc (MAHN.PK), Aetna Inc AET.N, Cigna Corp’s (CI.N) Bravo Health Inc and Humana Inc (HUM.N) was revealed in papers filed on Tuesday in federal court in Los Angeles, in a lawsuit the government recently joined against UnitedHealth Group Inc (UNH.N).

The department last month partially intervened in the U.S. False Claims Act lawsuit brought by a former UnitedHealth executive, Benjamin Poehling, whose whistleblower case against the company and other insurers was filed under seal in 2011.

Under the False Claims Act, whistleblowers can sue companies on the government’s behalf to recover taxpayer money paid out based on fraudulent claims.

If successful, whistleblowers receive a percentage of the recovery. A government decision to intervene is typically a major boost to such cases.

When it initially intervened in the case in February, the Justice Department said it was declining to pursue claims against other insurers named in the lawsuit besides UnitedHealth.

But on Tuesday, the Justice Department filed a “corrected notice” of intervention, saying that, due to ongoing investigations of Health Net, Aetna, Bravo and Humana, it could not make a decision as to whether to proceed against them.

Humana spokesman Tom Noland said in an email the company had previously disclosed the investigation in filings with the U.S. Securities and Exchange Commission. Humana has said it would cooperate with authorities.

UnitedHealth has said it rejects the allegations. A spokesman had no immediate comment on Friday.

Aetna and Health Net declined to comment. Representatives for Cigna did not respond to a request for comment on Friday, nor did the Justice Department. A lawyer for Poehling had no immediate comment.

Poehling’s lawsuit accused UnitedHealth, Health Net, Aetna, Bravo Health, Humana and other insurers of defrauding the United States of hundreds of millions - and likely billions - of dollars through claims for payments from the Medicare healthcare program for the elderly.

The lawsuit centered on “risk adjustment” payments that Medicare makes to managed-care plans to offset the increased costs associated with treating patients with multiple or serious health conditions.

The lawsuit claimed that, in seeking those payments, the insurers falsely claimed that patients were treated for diagnoses they did not have or were not treated for.

The case is U.S. ex rel. Benjamin Poehling v. UnitedHealth Group Inc et al, U.S. District Court, Central District of California, No. 16-cv-08697.

Reporting by Nate Raymond in Boston; Editing by Lisa Shumaker and Richard Chang

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