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(Reuters) – The U.S. Supreme Court on Tuesday declined to hear UnitedHealth Group Inc (NYSE:UNH)’s challenge to a government rule requiring private insurers that administer federally funded Medicare plans to return potentially billions of dollars in overpayments they receive based on incorrect diagnoses.
Turning away the Minnetonka, Minnesota-based insurer’s appeal, the justices left in place a lower court’s ruling reviving the rule after a federal judge had previously struck it down.
UnitedHealth did not immediately respond to a request for comment.
The 2014 rule applies to so-called Medicare Advantage insurance plans, which are funded through the U.S. Department of Health and Human Services (HHS) but administered by private insurers like UnitedHealth. HHS pays Medicare Advantage plans a base amount per beneficiary, adjusted according to diagnostic codes reflecting each beneficiary’s individual risk factors.
Under the rule, if a Medicare Advantage insurer learns that it received a payment based on an unsupported diagnosis, it must return that payment within 60 days.
According to a 2016 federal audit, the government paid out about $16.2 billion that year based on unsupported diagnoses, nearly 10% of the total paid to Medicare Advantage insurers.
