U.S. Supreme Court rebuffs UnitedHealth Group challenge on Medicare overpayments By Reuters

By Brendan Pierson

(Reuters) – The U.S. Supreme Court on Tuesday declined to hear UnitedHealth Group Inc (NYSE:)’s challenge to a government rule requiring private insurers that administer federally funded Medicare plans to return potentially billions of dollars in overpayments they receive based on incorrect diagnoses.

Turning away the Minnetonka, Minnesota-based insurer’s appeal, the justices left in place a lower court’s ruling reviving the rule after a federal judge had previously struck it down.

UnitedHealth did not immediately respond to a request for comment.

The 2014 rule applies to so-called Medicare Advantage insurance plans, which are funded through the U.S. Department of Health and Human Services (HHS) but administered by private insurers like UnitedHealth. HHS pays Medicare Advantage plans a base amount per beneficiary, adjusted according to diagnostic codes reflecting each beneficiary’s individual risk factors.

Under the rule, if a Medicare Advantage insurer learns that it received a payment based on an unsupported diagnosis, it must return that payment within 60 days.

According to a 2016 federal audit, the government paid out about $16.2 billion that year based on unsupported diagnoses, nearly 10% of the total paid to Medicare Advantage insurers.