Phillips & Cohen filed a qui tam case on behalf of a Florida doctor, Darren Sewell, which resulted in the largest settlement of a false claims case against a Medicare Advantage plan at the time. Freedom Health, Optimum Healthcare and their affiliates paid the federal government and the state of Florida $32.5 million to settle the case. The whistleblower’s lawsuit alleged that Freedom Health, Optimum Healthcare and their affiliates submitted false risk-adjustment data and misstated to Medicare the number of doctors and medical facilities that would be available to their members.
Another qui tam lawsuit filed by Phillips & Cohen alleged that Group Health Cooperative (now known as Kaiser Foundation Health Plan of Washington) submitted false risk-adjustment data for Medicare Advantage beneficiaries and received inflated payments from Medicare as a result. Kaiser Foundation Health Plan paid the government $6.37 million to settle the case.
DOJ has intervened in a whistleblower lawsuit filed by Phillips & Cohen against UnitedHealth Group that alleges risk-adjustment fraud. The qui tam complaint says that UHG developed a company-wide program to review the medical charts of its Medicare Advantage members to find additional diagnoses that would boost payments from Medicare to UnitedHealth. However, the lawsuit says, UnitedHealth avoided meaningfully investigating or correcting errors and high error rates that it found during those reviews because corrections would have decreased its Medicare payments.
DOJ filed a False Claims Act lawsuit against Anthem, one of the largest Medicare Advantage organizations, for allegedly submitting “inaccurate, and inflated, diagnosis information” that caused CMS to overpay Anthem.
Sutter Health, a California-based hospital system, paid $30 million to the Justice Department to settle allegations that it had submitted unsupported diagnosis codes to CMS, inflating its members’ risk scores and causing CMS to overpay Medicare Advantage plans. It was the first time that a healthcare provider was held accountable for its risk-adjustment practices.
The owners of a Medicare Advantage plan in Florida – Dr. Walter Janke and his wife, Lalita Janke – paid the federal government $22.6 million in 2010 to resolve allegations they caused Medicare to pay inflated capitation payments by submitting false diagnosis codes in connection with risk adjustment claims.
The government alleged the Jankes’ Medicare Advantage plan had hired “chart auditors” to look through medical records for additional or upcoded diagnoses that it could submit to CMS for increased payment — whether or not those diagnoses were actually eligible for risk adjustment under CMS rules.
The government also alleged the Jankes’ Medicare Advantage plan used a software program to submit diagnosis codes to CMS that was incapable of submitting delete codes to delete false data from CMS’s database and thereby correct mistakes, i.e., diagnosis codes the Medicare Advantage plan knew had been submitted improperly.