Feds Award Lavish Contract to Insider Company Linked To Medical Data Fraud

Health and Human Services (HHS) Secretary Sylvia Burwell awarded a rarely used open-ended sole-source contract to a firm whose corporate owners were embroiled in a $400 million fraudulent medical data scheme that cheated doctors and consumers, according to a Daily Caller News Foundation investigation.

The company Burwell selected is Optum Labs, which is part of United Health Group’s Optum subsidiary. Andrew Slavitt, President Barack Obama’s nominee to head HHS’s Centers for Medicare and Medicaid Services (CMS), was formerly a top Optum executive at the time of the fraudulent database involved in the scheme. The database enabled insurers to pay dramatically lower reimbursements to doctors and patients for out-of-network care.

Optum and United Health Groups settled the landmark fraud case with then-New York Attorney General Andrew Cuomo in 2009 and paid out a record $400 million. Optum Labs – which is one of nation’s largest medical data analytics companies – was not a party to the settlement.

Under the contract, Optum Labs will provide HHS with 160 million administrative claim records it accumulated over 20 years and 40 to 50 million electronic medical records it collected over the last seven years, according to Optum Lab spokesman Jeffrey Smith. Some of the records to be given to HHS are part of the database involved in the 2009 settlement, Smith says.