WASHINGTON (CN) — A federal judge has refused to dismiss claims that regulators made it easier for the government to hold insurers liable on Medicare overpayments.
One of many changes that arose from implementation of Obamacare, otherwise known as the Patient Protection and Affordable Care Act, the new rule published in 2014 classifies any inadequately documented diagnostic code not supported by underlying medical documentation as an overpayment.
A group of insurers participating in the Medical Advantage program brought a suit last year over the change.
Led by UnitedHealthcare Insurance Co., they accused the Centers for Medicare and Medicaid Services of subjecting them to more rigorous standards.
Contending that the False Claims Act contains a recklessness standard, they said the rule change would hold them liable for mere negligence.
Regulators moved to dismiss the case in Washington, but U.S. District Judge Rosemary Collyer refused on March 31.
Medicare Advantage provides eligible individuals with health care benefits through private insurers that have contracted with the Centers for Medicare and Medicaid Services. The insurers reimburse health care providers for services provided, and then CMS pays the insurers on a preset, per-member-per-month basis.
UnitedHealthcare’s challenge comes on behalf of 41 companies. They say the new rules for how insurers report and return overpayments is more arduous than how CMS assessed the health status of traditional Medicare beneficiaries.
A representative for the Department of Health and Human Services declined to comment on the ruling.