The U.S. Department of Justice elected not to file a second amended complaint-in-intervention in U.S. ex rel. Poehling v. UnitedHealth Group Inc., 2:16-cv-08697, a Federal False Claims Act (FCA) case pending in the U.S. District Court for the Central District of California against UnitedHealthcare Insurance Company (United), a Medicare Advantage plan provider. The case, filed under seal in 2011, alleged that United (i) failed to delete invalid diagnosis codes that were submitted to CMS through CMS’s Risk Adjustment Processing System and used by CMS to determine beneficiary risk scores (and by extension, payment amounts to United under its Medicare Advantage plan) and (ii) submitted false Risk Adjustment Attestations, certifying that the diagnosis codes submitted for risk adjustment payments are accurate and truthful. The government’s decision not to file a second amended complaint reflects its decision not to pursue allegations that United knowingly submitted false annual Risk Adjustment Attestations to the Medicare program.

On February 12, 2018, the court, applying the FCA materiality pleading standard from the Supreme Court decision in Universal Health Services Inc. v United States ex rel. Escobar, 136 S. Ct. 1989 (2016), determined that the Risk Adjustment Attestations could not trigger FCA liability because the government had not alleged, despite multiple opportunities, that the government would have withheld payment if it knew the Risk Adjustment Attestations were not accurate. The court’s order recognized that the government’s other FCA allegations relating to the underlying diagnostic data itself appeared to be material under the FCA, but the allegations concerning the Risk Adjustment Attestations did “not suggest they are likely to influence the payment of money.”  The court’s order gave the government until February 26, 2018, to file a second amended complaint to try to adequately plead the materiality of the Risk Adjustment Attestations. The government notified the court on February 26, 2018, that it elected not to file a second amended complaint-in-intervention.

The case will continue in connection with the FCA allegations that United knowingly failed to comply with the obligation to delete invalid diagnoses from CMS’s Risk Adjustment Processing System. The court’s February 12, 2018 order is available here.