UnitedHealth Group is facing a whistleblower lawsuit concerning its use of a peripheral artery disease test called QuantaFlo, which alleges the insurer used the device to improperly increase payments from the government's Medicare Advantage program. The lawsuit proceeds even as the U.S. Department of Justice (DOJ) declined to join the case against the healthcare giant.
This development comes to light as the DOJ announced significant settlements with the device's manufacturer, Semler Scientific, and its former distributor, C.R. Bard, resolving separate fraud allegations related to the same medical test.
Key Takeaways
- UnitedHealth Group is being sued by a whistleblower law firm for its use of the QuantaFlo peripheral artery disease test.
- The lawsuit alleges the test was used to inflate Medicare Advantage payments.
- The Department of Justice chose not to intervene in the case against UnitedHealth.
- Semler Scientific, the device maker, settled with the DOJ for $29.75 million over fraud claims.
- C.R. Bard, the former distributor, settled for $7.2 million.
UnitedHealth Lawsuit Moves Forward Without DOJ
A law firm specializing in healthcare fraud has initiated legal action against UnitedHealth Group, the largest health insurer in the United States. The core of the lawsuit centers on the company's application of the QuantaFlo system, a diagnostic tool for peripheral artery disease (PAD).
The complaint alleges that UnitedHealth utilized the test not primarily for patient diagnosis but as a method to document more severe health conditions for its Medicare Advantage members. Such documentation can lead to higher risk-adjustment payments from the federal government.
In a significant turn, the Department of Justice officially declined to intervene in the lawsuit against UnitedHealth. This decision was revealed in federal court documents unsealed recently. Under the False Claims Act, whistleblowers can pursue cases on behalf of the government even if the DOJ decides not to join, a process known as a qui tam lawsuit.
Understanding Medicare Advantage Payments
Medicare Advantage plans, administered by private insurers like UnitedHealth, receive payments from the government based on a system known as risk adjustment. This model provides higher reimbursement for patients with more serious or chronic health conditions.
Regulators have expressed concerns that some insurers may be incentivized to diagnose conditions aggressively or document ailments that do not require active treatment to maximize revenue. The lawsuit against UnitedHealth alleges that the use of the QuantaFlo test falls into this category.
What is Peripheral Artery Disease?
Peripheral artery disease (PAD) is a circulatory condition where narrowed blood vessels reduce blood flow to the limbs, most commonly the legs. It can be a sign of atherosclerosis, a more widespread accumulation of fatty deposits in the arteries. While it can be a serious condition, critics of widespread testing argue it can be over-diagnosed or used to document a risk factor rather than an active disease requiring treatment.
Device Maker and Distributor Settle Fraud Claims
While the case against UnitedHealth proceeds, the companies behind the QuantaFlo device have settled with the federal government. The DOJ announced settlements totaling nearly $37 million with the manufacturer and former distributor of the test.
Semler Scientific, the company that manufactures QuantaFlo, agreed to a payment of $29.75 million to resolve allegations of healthcare fraud. C.R. Bard, which previously distributed the device and is now a subsidiary of Becton, Dickinson and Company (BD), reached a separate agreement to pay $7.2 million.
These settlements resolve claims that the companies misrepresented the capabilities of the QuantaFlo device and encouraged healthcare providers to bill Medicare for services that did not meet the program's coverage requirements.
Settlement Breakdown
- Semler Scientific (Manufacturer): $29.75 million
- C.R. Bard (Former Distributor): $7.2 million
- Total Government Settlements: $36.95 million
The agreements underscore the government's focus on medical device companies and their marketing practices. Federal agencies are actively monitoring how devices are promoted and whether their use leads to unnecessary costs for taxpayer-funded programs like Medicare.
Government Officials Emphasize Accountability
Following the announcement of the settlements, federal officials issued statements reinforcing their commitment to combating healthcare fraud. The government's position highlights the responsibility of device companies to ensure their products are marketed accurately.
"Medical device companies that misrepresent the capabilities of their products and encourage providers to bill Medicare for services that do not meet coverage requirements drain critical taxpayer-funded resources," said Isaac Bledsoe, Acting Special Agent in Charge for the Department of Health and Human Services Office of Inspector General (HHS-OIG).
This statement reflects the government's stance that improper marketing that leads to inappropriate billing is a direct threat to the financial stability of federal healthcare programs. The settlements with Semler and Bard serve as a warning to other companies in the medical technology sector.
The Broader Implications for Health Insurers
The lawsuit against UnitedHealth and the parallel settlements place a spotlight on the entire Medicare Advantage industry. The risk-adjustment payment model has been a subject of scrutiny for years, with government auditors and watchdog groups raising alarms about potential upcoding—the practice of making patients seem sicker than they are to increase payments.
The focus on a specific diagnostic tool like QuantaFlo suggests that regulators are examining not just billing codes but the methods and devices used to generate diagnoses. The outcome of the UnitedHealth case could have wide-ranging effects on how insurers use diagnostic technologies and document patient health.
For now, UnitedHealth has not faced government action on this specific matter, but the ongoing whistleblower lawsuit ensures the issue will remain under legal and public scrutiny. The case will likely explore whether the insurer's use of the test was for legitimate clinical purposes or primarily for financial gain through the Medicare payment system.
