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D.C. Circuit overruling means the game is afoot!

A new ruling on the federal Overpayment Rule means that CMS could be coming after more private Medicare plans if they fail to comply.

A new court case has us predicting more False Claims Act suits against private payors operating Medicare Advantage plans. Let’s hope so, but first, let’s break it down.

First: Medicare Advantage.

Private carriers get paid by the federal government to manage risk and claims for Medicare enrollees. Sometimes, there are some discrepancies in payment or reimbursements – it’s a big system with a lot of moving parts.

Next: The Overpayment Rule of 2014.

This rule requires Medicare Advantage organizations to report and return any overpayment within 60 days after the payment is “identified.” Small wrinkle: “Identified” means the plan determined or should have determined, through “reasonable diligence.”

Okay, cool. Return the wallet once you realize you picked it up by accident. Easy.

But who steps in stage left?! United, of course.

Our nation’s healthcare behemoth, UnitedHealthcare, challenges the rule in 2016, arguing a bunch of legal mumbo jumbo that effectively accounts to alleging the government made the False Claims Act’s knowledge standard too low and violated a rule called “actuarial equivalence,” which ensures MA providers get paid like providers who get paid from traditional Medicare.

Our (admittedly biased) translation: Giving money…back? That sounds hard and we’d rather not.

But then the D.C. District Court agrees with United. They say UnitedHealthcare was right—not only did the Overpayment Rule conflict with the False Claim Act standards, but they claimed it also violated actuarial equivalence, because MA providers had new repayment rules that regular Medicare providers don’t.

*Five Years Later*

The D.C. Circuit overrules the district court, concluding that the Overpayment Rule “does not violate, or even implicate, actuarial equivalence.”

Look, it’s all very confusing. Perhaps a bit less than interesting. We know. But here’s the rub.

The ruling almost certainly means CMS will be coming after more private Medicare plans for failing to comply with that nifty Overpayment Rule. For one, as the article explains: Deputy Assistant Attorney General Michael Granston singled out Medicare Advantage fraud as an “important priority” for DOJ enforcement moving forward.

We’ve covered a slew of these lawsuits already. Will we see more to come? Medicare fraud is just more profit for carriers, dollars unspent on patient care. So, our hope is a resounding yes.

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