Litigation and agency actions heighten Medicare Advantage plans' FCA risks

Rachel Alexander (ralexander@wiley.law) and Brandon Moss (bmoss@wiley.law) are both Partners, and Ashley E. Bouchez (abouchez@wiley.law) is an Associate in the Washington, DC, office of Wiley Rein LLP.

In recent months, Medicare Advantage plans have seen significant shifts in the high-stakes landscape of the risk adjustment system. For one, in July, Attorney General Merrick Garland rescinded a former Department of Justice (DOJ) policy that limited the role of agency guidance in enforcement actions.[1] Now, DOJ attorneys are encouraged to liberally cite to and rely on such guidance—a particularly troubling result for Medicare Advantage plans embroiled in False Claims Act (FCA) litigation that turns on whether the plans knowingly failed to comply with a regulation or contract provision. And in August, the D.C. Circuit’s decision in UnitedHealthcare Insurance Company et al. v. Becerra[2] unwound UnitedHealth Group’s (UnitedHealth) successful challenge to the Medicare Advantage overpayment rule as the Court of Appeals determined that the rule does not violate the Medicare statute’s actuarial equivalence requirement. This decision represented a major win for the DOJ and qui tam whistleblowers looking to sue providers or Medicare Advantage plans for failure to report and return overpayments based on unsupported diagnoses. Together, DOJ’s course reversal on agency guidance and the D.C. Circuit’s holding in Becerra indicate that Medicare Advantage plans may find themselves in the crosshairs of the DOJ and qui tam whistleblowers who have brought or are looking to bring FCA suits based on alleged Medicare Advantage fraud, with the added burden of defending against claims that are based on both binding law and nonbinding subregulatory guidance.

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