False Claims Act Case Against UnitedHealth Faces Dismissal Recommendation

A Special Master has recommended granting UnitedHealth Group Inc’s UNH motion for summary judgment in a False Claims Act (FCA) case, concluding that the government lacks evidence to support its allegations.

In February, the Justice Department launched a civil fraud investigation into UnitedHealth’s Medicare billing practices.

The probe began in recent months and will examine UnitedHealth’s Medicare Advantage plans and physician groups following reports that the company received billions in federal payments for questionable diagnoses.

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Soon after Sen. Chuck Grassley (R-Iowa), chairman of the Senate Judiciary Committee and a former chairman of the Senate Finance Committee, sent a letter to UnitedHealth’s CEO Andrew Witty demanding detailed information on the company’s Medicare billing practices.

James Swoben filed the “whistleblower” lawsuit. In 2017, the United States intervened and filed a lawsuit against UnitedHealth, alleging the company obtained inflated risk adjustment payments based on untruthful and inaccurate information about the health status of beneficiaries enrolled in its largest Medicare Advantage Plan, UHC of California.

The recommendation also advises denying the government’s motion for partial summary adjudication.

On August 6, 2024, UnitedHealth filed a motion for summary judgment while the U.S. government sought partial summary judgment on whether materiality is an element of the FCA’s reverse false claims provision. Both parties submitted a joint brief and supplemental memoranda in response to the court’s directive for briefing procedures.

Scribd published a copy of the lawsuit online Tuesday.

The relator did not file a separate brief but participated in oral arguments.

The Special Master reviewed the submitted briefs, exhibits and arguments presented at a hearing on January 15, 2025.

The government’s case hinged on claims that UnitedHealth failed to return federal funds to which it allegedly was not entitled.

However, the Special Master concluded that the government lacked evidence for two essential elements of its FCA and related common law claims.

The motion notes the government’s claims that United improperly kept money paid to provide healthcare for Medicare Advantage (MA) members. However, after years of litigation, the government has not reviewed any medical records – the only real evidence that could confirm whether United was overpaid. This failure weakens its case.

As a result, the Special Master recommended that the court grant UnitedHealth’s motion for summary judgment and deny the government’s motion.

Under Rule 53(f)(2), parties have 14 days from the report’s issuance to file motions to adopt, modify or object to the recommendations.

The court’s prior order from May 5, 2020, also clarifies that new evidence or arguments not presented to the Special Master will not be considered.

The recommendation, if adopted by the court, would mark a significant legal victory for UnitedHealth, potentially ending the government’s case against the company.

Price Action: UNH stock is up 0.25% at $475.80 during the premarket session at the last check Wednesday.

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