UnitedHealth Sues American Renal Associates, Alleging Fraud
July 01 2016 - 9:10PM
Dow Jones News
UnitedHealth Group Inc. sued kidney-care chain American Renal
Associates Holdings Inc., accusing it of fraud as health-industry
fights escalate over who is allowed to help consumers pay for
Affordable Care Act coverage.
The lawsuit by the biggest U.S. health insurer, filed Friday in
U.S. District Court in Florida's Southern District, said American
Renal Associates engaged in a "fraudulent and illegal scheme" to
get larger payments from the insurer by convincing patients to sign
up for UnitedHealth plans and connecting them with a charity that
helped pay their premiums. The suit said the patients were eligible
for coverage from Medicare and/or Medicaid, but the dialysis
provider could receive far bigger reimbursements for treatments if
patients had the UnitedHealth plans.
American Renal Associates, a Beverly, Mass.-based company that
operates about 200 dialysis clinics and went public in April, said
in a statement that the suit is "without merit," and that it
intends to "vigorously defend this legal action for American Renal
and on behalf of all patients who choose and trust us with their
care." The company said it is "dedicated to putting patients
first."
The suit said American Renal Associates' reimbursement from
government programs was $300 or less per dialysis session, but it
sought to bill UnitedHealth around $4,000 a session. "The lone
motivating factor behind ARA's patient conversion efforts is ARA's
desire to maximize its own profits," the suit said.
The issue of third-party payment of health premiums has been a
point of tension under the ACA, which requires insurers to sell
plans to people regardless of their health conditions. Health-care
providers have an incentive to ensure their patients are covered,
which in turn can assure they are paid for their services.
Insurers, for their part, say that premium assistance by
health-care providers or affiliated charities often focuses on sick
patients who need a lot of services, which increases insurers'
costs and pushes up premiums for all policyholders.
Federal guidance on the issue has been murky. In 2013, the
Department of Health and Human Services suggested insurers should
reject premium payments that came from health-care providers
because they could "skew the insurance risk pool." But the
regulator later said its warning about third-party premium payments
didn't apply to certain entities, including independent nonprofits
focused on financial need that "do not consider enrollees' health
status." An HHS spokesman declined to comment.
In the past few years, more insurers have begun turning back
premium payments from some organizations.
The American Kidney Fund, the charity cited in UnitedHealth's
suit, said recently that six insurers in 34 states are now
rejecting payments from the group. Fund officials said its program
for paying dialysis patients' premiums is completely funded by
dialysis providers, and it has strict guidelines that keep it
independent from the funders. The program is specifically for
dialysis patients, an official with the nonprofit said.
In response to Friday's suit, a spokeswoman for the American
Kidney Fund said the fund isn't a party to the complaint and had no
comment on it.
In a statement, the American Kidney Fund's chief executive,
LaVarne Burton, said it helps "patients who are in financial need
to pay for the coverage they have chosen," including Medicare.
Some states have taken action: Louisiana, in 2014, passed a law
that required insurers to accept premium payments from the American
Kidney Fund, among other entities. In North Carolina, the state
regulator in a letter this May called the American Kidney Fund
premium payments "good public policy" and applauded a decision by
Blue Cross and Blue Shield of North Carolina to accept them.
But last month, Minnesota said insurers didn't have to accept
premium payments from health-care providers and organizations that
receive funding from them.
Idaho this week released similar guidelines, saying insurers
don't have to take payments from charities that get more than half
their support from health-care providers. If health-care providers
are "profiteering, it's causing the [premium] rates for everyone
else to be higher," said Dean Cameron, the director of the Idaho
Department of Insurance.
People getting dialysis for advanced kidney disease are
generally eligible for Medicare even before they turn 65, while
low-income people may also qualify for Medicaid.
In its suit, UnitedHealth said American Renal Associates
convinced some patients in Florida to drop Medicaid coverage.
Instead, UnitedHealth claims the dialysis provider got the patients
to switch to UnitedHealth's ACA plans, with premium aid from the
American Kidney Fund, even though UnitedHealth had rules against
accepting such third-party premium payments. The suit said
UnitedHealth has seen a similar pattern connected to American Renal
Associates in Ohio and potentially California. UnitedHealth lists
27 unnamed patients as examples, but says it believes more were
involved in the alleged pattern.
"Many of these patients have been hit with medical expenses that
would have been covered by their government-sponsored Medicare or
Medicaid plan, and we are confident that the Court will put a halt
to these illegal and fraudulent practices," a UnitedHealth
spokesman said in a statement.
In the suit, UnitedHealth is seeking unspecified damages and
wants the court to stop American Renal Associates from continuing
the practices alleged in the complaint.
Write to Anna Wilde Mathews at anna.mathews@wsj.com
(END) Dow Jones Newswires
July 01, 2016 20:55 ET (00:55 GMT)
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