Key Litigation and Audits involving Risk Adjustment

If you work in risk adjustment - you should be familiar with these cases. 

• On May 30, 2017, Freedom Health Inc., a Tampa, Florida-based provider of managed care services, and its related corporate entities (collectively “Freedom Health”), agreed to pay $31,695,593 to resolve allegations that they violated the False Claims Act by engaging in illegal schemes to maximize their payment from the government in connection with their Medicare Advantage plans, according to the Justice Department.

• On October 1, 2018, HealthCare Partners Holdings LLC, doing business as DaVita Medical Holdings LLC (DaVita), agreed to pay $270 million to resolve its False Claims Act liability for providing inaccurate information that caused Medicare Advantage Plans to receive inflated Medicare payments, according to the Justice Department. DaVita is headquartered in El Segundo, California. 

• On April 12, 2019, Sutter Health LLC, a California-based healthcare services provider, and several affiliated entities, Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation, Sutter Gould Medical Foundation, and Sutter Medical Foundation, agreed to pay $30 million to resolve allegations that the affiliated entities submitted inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans, which resulted in the plans and providers being overpaid.

• On December 10, 2019, the OIG published a report, “Billions in Estimated Medicare Advantage Payments From Chart Reviews Raise Concerns”. The OIG found that diagnoses MAOs reported only on chart reviews-and not on any service records-resulted in an estimated $6.7 billion in risk-adjusted payments for 2017.

• On March 27, 2020, Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that the United States filed a civil fraud lawsuit against Anthem, Inc. (“Anthem”), alleging that Anthem falsely certified the accuracy of the diagnosis data it submitted to the Centers for Medicare and Medicaid Services (“CMS”) for risk-adjustment purposes under Medicare Part C and knowingly failed to delete inaccurate diagnosis codes.  As a result of these acts, Anthem caused CMS to calculate the risk-adjustment payments to Anthem based on inaccurate, and inflated, diagnosis information, which enabled Anthem to obtain millions of dollars in Medicare funds to which it was not entitled.

• On June 23, 2020, Aveta Inc. and a whistleblower settled a False Claims Act suit alleging that its Medicare Advantage plans collected $1 billion in government overpayments, ending a dispute that served as an early test for litigation involving risk adjustment fraud.  

• On August 5, 2020, a whistleblower case filed by the Department of Justice was unsealed. The complaint accuses Cigna of fraudulently overbilling for its Medicare Advantage plans. A former service provider for Cigna’s Medicare Advantage subsidiary alleged that the company sent providers to patients’ homes to conduct a health assessment, which was then improperly submitted to the Centers for Medicare and Medicaid Services for risk adjustment. Allegations include claims the company submitted unsupported diagnoses that resulted in “billions” in overpayments. Litigation is ongoing - 7:17-cv-07515-KMK-JCM United States of America, EX REL. Robert A. Cutler v. Cigna Corp. et al.

• On November 16, 2020, Kaiser Foundation Health Plan of Washington, formerly known as Group Health Cooperative (GHC), agreed to pay $6,375,000 to resolve allegations that it submitted invalid diagnoses to Medicare for Medicare Advantage beneficiaries and received inflated payments from Medicare as a result, the Justice Department announced.

• On April 19, 2021, the OIG published an audit of diagnosis codes that Humana submitted to CMS for one contract. The OIG recommended that Humana refund to the Federal Government the $197.7 million of net overpayments and enhance its policies and procedures to prevent, detect, and correct noncompliance with Federal requirements for diagnosis codes that are used to calculate risk-adjusted payments.

• On July 30, 2021, the United States intervened in six separate False Claims Act (FCA) whistleblower cases alleging Medicare Advantage fraud.  The lawsuits allege that Kaiser Permanente and several of its medical groups knowingly submitted inaccurate diagnosis codes for their Medicare Advantage Plan enrollees.  The suit alleges that Kaiser did this to receive higher reimbursements from the government. Litigation is ongoing in all cases. 

• On August 30, 2021, the government announced a $90 million False Claims Act settlement with California-based health care services provider Sutter Health.  The settlement resolves allegations that Sutter knowingly submitted inaccurate diagnosis codes for beneficiaries enrolled in Medicare Advantage Plans.  This inaccurate information led to inflated payments to Medicare Advantage Plans and Sutter Health.

• On September 14, 2021, DOJ filed a Medicare Advantage fraud lawsuit against Independent Health and its former CEO.  Independent Health offers two Medicare Advantage Plans in New York State.  The United States has also sued Independent Health’s subsidiary, DxID.  DxID provided retrospective chart review and addenda services to Independent Health and other MA Plans. The case is captioned United States ex rel. Ross v. Independent Health Association et al., No. 12-CV-0299(S)