By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, MA.
A Health Care Provider Defense and Compliance Firm

The U.S. Department of Justice (DOJ) has taken a significant step in its investigation into UnitedHealth Group’s Medicare Advantage practices by interviewing former UnitedHealth employed physicians and nurses. At the heart of this probe is an allegation many in the industry have long suspected: that Medicare Advantage plans are manipulating risk-adjusted coding to inflate reimbursements.

Here’s what you need to know especially if you’re a provider operating in this highly scrutinized landscape.

The Allegations
According to the Wall Street Journal, the DOJ, in coordination with the FBI and the Department of Health and Human Services, is examining whether UnitedHealth encouraged doctors and nurses to:

• Record specific diagnoses that triggered higher Medicare Advantage reimbursements;
• Use software and internal coding tools designed to “suggest” profitable diagnosis codes;
• Send nurses into patients’ homes under programs like HouseCalls to support those diagnoses;
• Reward providers with bonuses for capturing targeted diagnostic codes.

This raises major red flags under the False Claims Act (FCA), especially in light of DOJ’s long-standing enforcement focus on Medicare Advantage risk-adjustment fraud.

Coding Under the Microscope

Former employees describe a culture focused more on maximizing codes than ensuring medical necessity. DOJ reportedly asked about:

• “Training” on how to reach certain diagnoses;
• Conditions like peripheral artery disease and secondary hyperaldosteronism;
• Use of devices like QuantaFlo to detect certain diseases;
• Bonuses tied to reviewing pre-populated diagnosis lists.

Let’s be clear: risk adjustment is lawful. But pressuring providers to diagnose based on financial incentives, rather than clinical judgment, may constitute fraud.

UnitedHealth’s Response

UnitedHealth denies wrongdoing and stands by its Medicare Advantage program, calling the Journal’s reporting part of a “sustained campaign” based on “incomplete data” and a “flawed understanding.” It has also pledged to implement third-party oversight of its risk adjustment coding practices.

This defensive posture isn’t surprising. UnitedHealth is already one of several Medicare Advantage organizations that have been sued by the federal government over inflated risk-adjustment claims and DOJ’s track record in these cases has been mixed. Still, this latest development shows that DOJ isn’t walking away from the fight.

Why This Matters to Providers

While this story is about UnitedHealth, its implications ripple throughout the industry:

1. Contracted Providers Are on the Hook Too: If your behavioral health practice, medical group, or SUD facility provides services to Medicare Advantage enrollees, your documentation must support every diagnosis you submit whether it’s prompted by a payer or not.
2. Upcoding Risks Are Real: Whether a diagnosis is made in a facility or during a home visit, the medical record must support it. “Fishing” for diagnoses with screening tools can put your organization in DOJ’s crosshairs.
3. Audit Activity Is Increasing: Plans are pushing more chart reviews and retroactive audits down to their contracted providers. If you’re seeing upticks in record requests or coding “validation” reviews, this may be why.
4. FCA and EKRA Overlap: If bonuses or financial incentives are tied to specific diagnoses or conditions and those drive Medicare payments you may also face scrutiny under the False Claims Act or even the Eliminating Kickbacks in Recovery Act (EKRA), depending on how you’re structured.

At Parrella Health Law, we help providers understand the difference between compliant risk adjustment and risky coding behavior and how to respond when a payer or the government comes knocking.

If you have any questions or comments about the subject of this blog, please contact Parrella Health Law at 857.328.0382 or Chris directly at cparrella@parrellahealthlaw.com.