Medicaid fraud allegations against United are plausible, Georgia judge rules
A lawsuit filed in Macon federal court in 2019 alleged that UnitedHealthcare committed fraudulent practices and exploited elderly patients, according to court records.
Though the healthcare company attempted to dismiss the lawsuit, Judge Marc Treadwell believed the allegations were “plausibly pled,” according to his order made Wednesday.
Brook Gonite, a former salesperson for UnitedHealthcare, filed a qui tam lawsuit against the company in 2019 for allegedly violating multiple healthcare regulations. A qui tam lawsuit allows an individual to sue on behalf of the government. The lawsuit claimed the insurance company illegally enrolled elderly patients into their Medicare Advantage Plan for special needs, which would be covered in capitation payments by the Centers for Medicare and Medicaid Services that were sent to the company. The lawsuit had been under seal until 2024.
But UnitedHealthcare attempted to dismiss the lawsuit by claiming that Gonite failed to back up the allegations. Judge Marc Treadwell, however, denied the request, saying Gonite had provided enough information to show that there was fraud in attempting to sell their Medicare Advantage Plans.
Gonite, who worked in executing plans to sell Medicare Advantage Plans to patients living in nursing facilities throughout Georgia until 2018, had “direct and firsthand knowledge of the fraudulent activity,” the complaint says.
“Gonite has sufficiently alleged the ‘time, place, and substance of the alleged fraud, specifically the details of the defendants’ allegedly fraudulent acts, when they occurred, and who engaged in them,’” Treadwell ruled.
What was UnitedHealthcare accused of?
Gonite accused UnitedHealthcare of:
- Implementing a scheme to submit fraudulent claims.
- Making false records for payment that represented that the insurance company was compliant with regulations related to the marketing of their Medicare Advantage plans, the Health Insurance Portability and Accountability Act and the Anti-Kickback Statute. HIPAA protects patients from having their information shared while the Anti-Kickback Stature ensures federal healthcare programs “pay only for goods and services selected specifically to meet a patient’s individual medical needs and not for goods or services ordered by parties seeking to enrich themselves at taxpayers’ expense,” the lawsuit argues.
- Fraudulently inducing the government to enter into annual contracts and falsely certifying their compliance with Medicare’s marketing rules and federal law, like the False Claims Act and the law prohibiting kickbacks.
- Failing to report and return overpayments from Medicare.
- Entering into a conspiracy to defraud the U.S. government.
- Submitting false claims to the Georgia Medicaid Program for payment or approval of their premiums for patients who were “improperly solicited” and “wrongfully obtained,” according to the lawsuit.
While Treadwell ruled that Gonite “plausibly pled” most of his claims, the judge ruled against the one that said UnitedHealthcare entered into a conspiracy to defraud the government. . Treadwell said Gonite’s “failure to identify which individuals or entities conspired with each other, or to cite specific facts that show an unlawful agreement, is fatal to his conspiracy claim,” the judge said in his ruling.
Gonite wants a jury trial and for damages and civil penalties to be owed to the government and Georgia.
“The U.S. Department of Justice already investigated this matter and declined to join the case,” said a representative of UnitedHealthcare. “The accusations are without merit, and we will continue to defend ourselves. Our business practices have always been transparent, lawful and approved by our regulator, CMS.”
Details of the allegations
The complaint said that once Gonite, who had previously worked for UnitedHealthcare, returned to work at the insurance company in 2015, their sales practices were consistent with their policies and marketing regulations. The primary method of marketing their healthcare plans to patients was “to sit at a table in a common area of the nursing facility and wait for a potential beneficiary or responsible party to initiate contact,” because “they were prohibited from marketing the plans directly to potential beneficiaries or responsible parties until the potential beneficiary signed an authorization form or business reply card,” the complaint said.
But UnitedHealthcare struggled to get clients using this approach.
When James Rodgers took over as the sales director in Georgia, Alabama and Florida, “the atmosphere and sales tactics completely changed in 2016,” the complaint said.
In order to enroll as many people into its insurance policy, Rodgers set “unrealistic goals” and would direct his sales team to sell the policy, disregarding the marketing regulations and the Anti-Kickback scheme. The complaint said that he didn’t care how they met their numbers, “as long as you make me look good.”
Rodgers suggested that his sales team set up meetings with key decision-makers in the facility and tell them that, for their contract with UnitedHealthcare to go live, the nursing home facility needed 40% of its residents enrolled in their insurance programs and 20 returned business reply cards. He also told them, according to the complaint, that once the contract went live, the nursing facilities would have “the opportunity to be part of the UnitedHealth ... provider network and obtain additional payments such as incentive ... and implementation payments.”
Rodger also had Gonite and other members of the sales team meet with key personnel of the nursing facility separately and offer “free food and other items of value,” the complaint said. In exchange, Rodgers and other members of his sales team requested a list of their patients that included their personal information, like a picture of their face, name, age, date of birth, social security number, address, room number, Medicare or Medicaid number, phone number, diagnoses, advanced directive information, admission date, physicians, insurance carrier and the patient’s responsible party and their contact information, which are protected by HIPAA, according to the complaint.
The members of the sales team who bought the dinners for the personnel of the nursing facilities were to be reimbursed “without any questions,” according to the complaint. They also had certain nursing facilities sign a form that authorized them to disclose their patients’ contact information.
With the contact of the patient’s responsible party, members of the sales team reached out to them to solicit their nursing plan “without their consent,” as the training manual suggests. Further, when an authorization card was signed, the sales team directed the patients or their responsible parties to leave the date section of the form blank “since oftentimes these were obtained after (United Healthcare) had illegally made unsolicited contact to market (their insurance plan), “ the complaint said.
Nursing facilities allegedly given kickbacks
For nursing facilities that went “above and beyond” in helping UnitedHealthcare meet its sales goals, Rodgers would personally deliver checks worth $1,200 to $3,500 and explained that they were the nursing facilities’ bonus payments.
“All claims resulting from these unlawful kickbacks are tainted, and thus false, including claims to Medicare for capitated payments for patients enrolled under a tainted referral, and claims to Medicaid for those patients’ Medicare Advantage premiums,” the complaint said.
Nursing facilities in Macon, Milledgeville, Tybee Island, Conyers, Savannah, Atlanta, Augusta, Pooler, Rome, Fairburn, Decatur, Jonesboro, Stone Mountain and Lithonia entered into a contract with UnitedHealthcare with the alleged fraudulent practices, the complaint said.
Gonite also explained that the alleged fraudulent practices also occurred outside of Georgia, considering Rodgers was being pressured by his supervisor, James John Louise, to achieve the insurance company’s sales goals. Louise also supervised sales directors in New York and New Jersey, which led him to believe that “sales personnel ... also improperly solicited Medicare and Medicaid patients,” according to the complaint.
What now?
The case moves forward through the court system to potentially be heard in front of a jury. As of the time of this publication, no court hearing has been scheduled.
This story was originally published April 25, 2025 at 3:32 PM.
