UnitedHealth Group False Claims Suit Back on Track

The whistleblower suit involves charges by two former employees that UHG and AmeriChoice provided kickbacks to a New Jersey medical clinic to induce the clinic to switch its patients to the healthcare provider's Medicare and Medicaid programs.

Charles Wilkins and Daryl Willis also alleged that AmeriChoice violated the Medicare Anti–Kickback Statute by “enticing doctors to provide the names of patients eligible for Medicare and Medicaid programs” and that the insurers “knowingly violated several Medicare marketing regulations, resulting in their submission of false claims for payment to the federal government.”

The Third Circuit last week affirmed the district court’s May 2010 dismissal of False Claim Actallegations based on UHG and AmeriChoice’s violation of Medicare marketing regulations. However, it remanded part of the case back to district court for further proceedings.

According to the ruling the district court erred in granting the motion to dismiss the portion of the suit that involves allegations that UHG and AmeriChoice submitted false claims to the government by violating the Medicare Anti-Kickback Statute.

The district court had held that compliance with the AKS was not a condition for payment from the government under the federal health insurance program and that Wilkins and Willis didn’t have a claim for relief under the False Claims Act.

According to the facts and procedural history included in the ruling, Wilkins and Willis began working with UnitedHealth Group and AmeriChoice in 2007, Willis as a general manager for Medicare/Medicaid marketing and sales and Wilkins as a sales representative. In 2008, UnitedHealth terminated Wilkins' employment and demoted and then terminated Willis, allegedly for their complaints about what they perceived as illegal practices.

Among the allegations in the suit, which was filed in 2008, is that AmeriChoice's sales representatives paid $27,000 to Reliance Medical Group to switch certain eligible beneficiaries to its Medicare and Medicaid plans and that United Health's sales representatives offered payments to physicians in exchange for the physicians providing the names of potential new enrollees eligible for Medicare and Medicaid.

In remanding the anti-kickback portion of the suit the Third Circuit Court of Appeals noted “compliance with the AKS is clearly a condition of payment under Parts C and D of Medicare and appellees (UHG and AmeriChoice-New Jersey) do not refer us to any judicial precedent holding otherwise.” The ruling also stated that Walkins and Willis “ by alleging that appellees violated the AKS while submitting claims for payment to a federal health insurance program, have stated a plausible claim for relief under the FCA.”

UnitedHealth Group has not issued a statement on the case.