UnitedHealthcare won its case over a 2014 rule implemented by the Centers for Medicare and Medicaid Services (CMS) requiring that Medicare Advantage organizations report and return any identified overpayments. The rule was deemed arbitrary and capricious.
U.S. District Court Judge Rosemary Collyer vacated the rule in its entirety, claiming it violated the law requiring payments to be actuarially equivalent to traditional fee-for-service providers.
The lawsuit read, in part:
“[T]he Secretary shall adjust the payment amount [of fixed monthly payments to Medicare Advantage insurers] for such risk factors as age, disability status, gender, institutional status, and such other factors as the Secretary determines to be appropriate, including adjustment for health status . . ., so as to ensure actuarial equivalence.”
CMS has the opportunity to appeal this ruling.
The issue for insurers is in the way CMS currently calculates its payments. According to the ruling, the current system makes Medicare Advantage enrollees seem as though they are in better health than traditional Medicare beneficiaries, leading MA insurers to receive underpayments. The CMS intends to pay Medicare Advantage plans and traditional Medicare in an “actuarially equivalent” way.
UnitedHealth alleged the scores must contain errors and set the rate as high as 20 percent.
A complaint from UnitedHealth was filed in January 2016 and CMS later filed a motion to dismiss which the court denied. This lawsuit is one of several Medicare Advantage lawsuits UnitedHealth has come out on top of recently.
For more on the ruling, check out ModernHealthcare’s article,
Or read Healthcare Finance’s piece on the matter.