Medicare Advantage Can Sue CMS Over Overpayment Rule

U.S. District Judge Rosemary Collyer ruled last week that a group of United Healthcare insurers participating in the Medicare Advantage program have standing to sue the Centers for Medicare & Medicaid Services (CMS) over a May 2014 rule detailing the requirements and penalties insurers face when they receive overpayments.

The May 2014 rule requires Medicare Advantage organizations to return overpayments to the government within 60 days of identifying them or they will find themselves in violation of the False Claims Act (FCA) and potentially subject to civil lawsuits, treble damages and additional penalties.

UnitedHealthcare filed suit against the CMS in January 2016, alleging the rule enabled insurers to be sued for negligence under the FCA, a lower bar than the recklessness standard, which is usually applied in such cases.

In essence, Judge Collyer found the CMS policy imposed a new obligation on Medicare Advantage organizations, and as such, was subject to judicial review.

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