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UnitedHealth Accused of Overcharging Medicare by Hundreds of Millions of Dollars

The U.S. Department of Justice (DOJ) has joined a whistleblower lawsuit against UnitedHealth Group," reports Fortune (Feb. 17), "that claims the country's largest health insurer and its units and affiliates overcharged Medicare hundreds of millions of dollars. The lawsuit was filed in 2011 and unsealed yesterday. According to the law firm of Constantine Cannon, which represents the whistleblower in this case, UnitedHealth Group allegedly overcharged Medicare by claiming the federal health insurance program's members nationwide were sicker than they were. UnitedHealth spokesman Matthew Burns issued a statement that read: "We reject these more than five-year-old claims and will contest them vigorously."

Reuters (Feb. 16), meanwhile, adds that the DOJ has also joined in allegations against WellMed Medical Management Inc, a Texas healthcare firm that UnitedHealth acquired in 2011. The lawsuit by whistleblower Benjamin Phoeling, an ex-UnitedHealth executive, has indeed been kept under seal in federal court in California while Justice officials investigated the claims for the last five years. "No total damages were specified in the lawsuit," notes the wire service.

More specifically, Modern Healthcare (Feb. 16, Livingston) notes that UnitedHealth is accused of collecting payments from false claims that it treated patients for conditions they did not have, for more severe conditions than they had, conditions that had already been treated, and/or diagnoses that failed to meet the requirements for risk adjustment. The lawsuit contends that, in 2010, UnitedHealth schemed to boost operating income by $100 million via "Project 7," the company's codeword for initiatives to increase risk adjustme