UnitedHealthcare loses Medicare overpayment appeal: 5 things to know

A federal appeals court ruled against UnitedHealthcare Aug. 13 in a case involving Medicare Advantage overpayments. 

Five things to know:

1. In a 49-page opinion, the U.S. Court of Appeals for the District of Columbia Circuit reversed a 2018 decision that vacated Medicare's overpayment rule, which requires insurers to refund payment to CMS within 60 days if it learns a diagnosis lacks medical record support.

2. UnitedHealthcare had argued the overpayment rule was subject to "actuarial equivalence." However, the court ruled actuarial equivalence doesn't apply to the overpayment rule, and there's no legal basis for UnitedHealthcare's claim.

3. "Even if actuarial equivalence applied as UnitedHealth suggests, it would be UnitedHealth's burden to show the systematically skewed inaccuracies on which its theory depends, which it has not done," the court ruled. "Also fatal to UnitedHealth's claim is that it never challenged the values CMS assigned to the risk factors it identified or the level of the capitation payments resulting from CMS’s risk-adjustment model."

4. The court rejected UnitedHealth's claims that the overpayment rule violates the statute's "same methodology" requirement, as well as its argument that the rule is arbitrary and capricious for the same reasons. 

5. CMS has been targeting Medicare overpayments, with the agency saying health insurers have overcharged the program by nearly $30 million in recent years. CMS argues Medicare Advantage insurers are overcharging the government through elevated risk scores that exaggerate how sick patients are. 

Becker's reached out to UnitedHealthcare for comment. This article will be updated as more information becomes available. 

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