Pennsylvania Record

Thursday, January 23, 2020

Judge stops whistleblower case against former UnitedHealth subsidiary after DOJ asks for dismissal

Federal Court

By Karen Kidd | Dec 3, 2019

U.S. District Court Judge Michael M. Baylson |

PHILADELPHIA – A whistleblower's seven-year-old complaint over allegations of False Claims Act violations against a former UnitedHealth Group subsidiary - a suit the government opposed - now has been fully dismissed.

In his 38-page final memorandum issued Nov. 5, U.S. District Court Judge Michael M. Baylson, on the bench in the U.S. District Court for the Eastern District of Pennsylvania, dismissed the whistleblowing physician's third amended complaint with prejudice.

Baylson issued his order after granting a government motion to dismiss.

"The court also finds that, independent of dismissal based on the government's motion, summary judgment is properly granted to defendant on the Phase 1 claims," the memorandum said.

Physician and relator in the case, Jesse Polansky, a former Executive Health Resources employee, filed his initial whistleblower lawsuit in July 2012 accusing the subsidiary of UnitedHealth Group of fraud. Polansky alleged that Executive Health Resources advised its client hospitals to fraudulently bill Medicare and Medicaid by designating outpatient admissions as the higher cost "inpatient" designation.

"The core of relator's theory of liability is that defendant exploited the difference in reimbursement rates for inpatient and outpatient services, causing hundreds of thousands of claims for medical services to be billed as inpatient when they should have been billed as outpatient," the memorandum said.

Executive Health Resources is now Optum360, which is based in Tampa, Fla.

The U.S. Department of Justice investigated the allegations but declined to intervene or take any action against Executive Health Resources.

"In point of fact, the government went even further than declining to intervene—it moved to dismiss relator’s claims entirely after lengthy and careful consideration," the memorandum said. 

"The government’s apparent view that relator's claims are not worthy of even private enforcement is relevant because it underscores the conclusion that defendant's alleged fraud was not material in the eyes of the payor and ultimate beneficiary of relator's claims - the government."

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