Citing court costs, US seeks dismissal of 7-year whistleblower suit against UnitedHealth Group unit

The U.S. government asked a federal judge on Aug. 20 to dismiss allegations that a UnitedHealth Group unit violated the False Claims Act by committing hospital billing fraud, according to Law360.

The U.S. Justice Department said in court documents that it decided dismissing the whistleblower lawsuit "furthers the valid government purpose of conserving federal resources by avoiding further litigation costs and preserving government privileges."

The federal government has "devoted a considerable amount of time" to the seven-year-long case, and — given recent discovery orders as well as the plaintiff's actions — the "actual and potential costs" of allowing the case to proceed outweigh the potential benefits of doing so, the Justice Department added.

Former Executive Health Resources employee Jesse Polansky, MD, filed the whistleblower lawsuit in July 2012, accusing UnitedHealth Group subsidiary Executive Health Resources, now called Optum360, of fraud. According to court documents, the lawsuit claimed Executive Health Resources advised client hospitals to bill Medicare or Medicaid for inpatient admissions, when the more appropriate billing designation would have been for outpatient observation care. Dr. Polansky alleged the "scheme" was to increase Medicare and Medicaid payments for the hospitals.

The Justice Department investigated but decided not to intervene in the case.

However, between December 2017 and September 2018, Executive Health Resources issued subpoenas for documents and deposition testimony to CMS, where Dr. Polansky previously worked, and other federal agencies, according to court documents.

The documents state that CMS had produced more than 42,000 pages of documents as of June 3. Additionally, in January, Executive Health Resources filed a motion for sanctions against Dr. Polansky's counsel regarding the belated production of 14,000 CMS documents, the Justice Department said. The court granted the sanctions in February.

A spokesperson for Optum praised the federal government's determination to seek a dismissal of the case based on the plaintiff's actions and other matters.

"We have vigorously defended ourselves against these meritless allegations and are pleased that the government has moved to dismiss this case," the spokesperson told Becker's.

Editor's note: This article was updated Aug. 28 at 10:30 a.m. to clarify that sanctions were issued to Dr. Polanksy's counsel. 

More articles on legal and regulatory issues:

Former Arkansas physician charged in deaths of 3 patients
University of Iowa Hospitals faces potential class-action lawsuit over pay practices
UHS execs, directors escape lawsuit over billing practices



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