A federal judge has tossed out a U.S. government lawsuit accusing UnitedHealth Group of overcharging Medicare.
The case is one of two whistleblower lawsuits alleging similar conduct. In one, the government says wrongful payments to UnitedHealth exceed $1 billion.
The U.S. Department of Justice contends the big health insurer violated the federal False Claims Act so it could collect more money in Medicare reimbursements.
The Medicare Advantage program pays insurers based on a person's health status: less for healthy enrollees, but more for people who are less well.
The goal is to ensure insurers accept people who are sicker and likely to incur greater medical costs.
The government accuses UnitedHealth of gaming the system and overstating patients' health risks.
"United violated the FCA by conducting biased, one-sided medical record reviews, thereby distorting the information it provided to the Medicare Program about the health status of Medicare beneficiaries in order to obtain payments to which it was not entitled from the Medicare Program."
But a federal judge in California overseeing one case says the government fell short on several points.
Judge John F. Walter said the Justice Department failed to identify corporate officers who had vouched for the data's accuracy, or that corporate officers knew or should have known the records were false.
The judge also said prosecutors had not shown the government would have denied payments if it had been aware of the purported misconduct.
However Walter ruled the department can amend its complaint.
UnitedHealth and the DOJ declined to comment.