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Catch of the Week: CMS Suspends UnitedHealth and Anthem Medical Advantage Plans for Charging Too Much in Premiums

Posted  September 24, 2021

CMS suspended three UnitedHealth Medicare Advantage (MA) plans and one Anthem MA plan this week for failing to meet federal Medical Loss Ratio requirements. The four plans – United of the Midwest, United of New Mexico, United of Arkansas, and Anthem’s MMM Healthcare – are prohibited from enrolling new members until 2023. MMM Healthcare is the largest MA plan in Puerto Rico, with more than 260,000 enrollees. The suspension also stands to impact roughly 80,000 UnitedHealth MA enrollees. 

MA plans, also known as Medicare Part C plans, are a comprehensive alternative to traditional Medicare Part A (hospital services) and Part B (physician services) plans. Pursuant to the Affordable Care Act, all Medicare plans, including MA plans, must meet medical loss ratio requirements. Medical loss ratios (MLR) reflect the percentage of premium dollars an insurer spends on actual medical care or quality improvement initiatives, rather than on administrative expenses, costs and profits. Depending on the circumstances, MA plans are required to meet a minimum MLR of 80% or 85%. MA plans that fail to meet these requirements must repay customers a portion of their premiums in the form of a “rebate.” When an MA plan fails to meet the minimum MRL for three straight years, CMS must suspend the plan from accepting new enrollees for the next year. 

Considering the severe consequences MA plans can face for failing to meet MLR requirements, it comes as no surprise that an MAO may engage in fraud to avoid reporting a failing MLR. This fraud can take many forms, including the reporting of false data to overstate MLRs or the overpaying of providers for medical care. These and other MLR fraud schemes can violate the False Claims Act (FCA). The perpetrators of MLR fraud may be liable for up to three times the government’s losses and may also have to pay penalties for each false claim they submit.  Whistleblowers are empowered to bring FCA claims on the Government’s behalf under the FCA’s qui tam provision and may receive a share of the Government’s recovery. If you have information about possible medical loss ratio fraud or other Medicare Advantage fraud, please contact us. 

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Tagged in: Catch of the Week, FCA Federal, Healthcare Fraud, Managed Care, Medicare,