Whistleblower lawsuit against UnitedHealth, Aetna, Health Net revived over Medicare Advantage scores

A whistleblower case believed dead involving claims of inflated Medicare Advantage risk scores has been resurrected by a federal court.

The United States Court of Appeals in California this month vacated a lower court ruling, sending the case back to the district court.

Whistleblower James M. Swoben, a former SCAN health plan employee -  with the Department of Justice intervening in 2013 -  brought a false claims lawsuit against several major health systems including UnitedHealthcare, UnitedHealth Group, WellPoint, Aetna, Health Net and physician group HealthCare Partners.

Swoben claims the organizations inflated Medicare Advantage risk scores to collect bigger government payments.

The Centers for Medicare and Medicaid Services pays Medicare Advantage organizations based on the risk score of beneficiaries served. The risk adjustment methodology relies on enrollee diagnoses codes, which are based on medical documentation.

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The gist of Swoben's complaint is that the organizations conducted one-sided retrospective reviews on under-reporting errors, exaggerating enrollees' health risks to get more money.

Swoben alleges they retained coding companies or purchased specialized software to perform retrospective reviews of the medical charts of tens of thousands of patients with severe illnesses, but concealed from the coders the diagnosis codes that had been previously submitted to the government, according to the lawsuit.

The appeals court said Medicare Advantage organizations have a financial incentive to exaggerate an enrollee's health risks by reporting diagnosis codes that may not be supported by an enrollee's medical records.

Routine audits showed a 20 percent error rate on codes not supported by medical records, court documents said.

The lower court denied Swoben in 2013, based partly on what it said was an overly-vague case and undue delay.

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The appeals court this month said the district court abused its discretion.

Swoben originally made a complaint against California-based SCAN Health in 2009, where he worked as a data manager, according to Law360.

He amended that complaint three times over the next two years to add claims against UnitedHealth, HealthCare Partners, Aetna, WellPoint and Health Net, Law360 said.

SCAN Health removed itself from the suit by paying a record $322 million settlement, Law360 said.

It appears Swoben did not financially benefit from that payment as he later reportedly told a California federal judge he should not be denied a share of the settlement.

Twitter: @SusanJMorse