Court Compels Medicare Advantage Plan to Comply With CID for Testimony in Diagnosis Coding Investigation

On November 13, 2018, a magistrate judge issued a report to the United States District Court for the Southern District of New York recommending that the Department of Justice’s (“DOJ”) petition to compel deposition testimony from Anthem regarding its procedures and processes for verifying diagnoses for Medicare Advantage payments be granted and that a date be set for Anthem’s witness to testify.  DOJ is seeking the testimony in connection with its investigation of Anthem as part of its broader enforcement efforts under the FCA focused on the Medicare Advantage program. 

In particular, DOJ sought to compel Anthem’s testimony regarding: 1) Anthem’s processes and procedures to determine which diagnoses codes to include in the CMS submissions for each beneficiary; 2) policies, procedures, and training to ensure that diagnoses codes were valid and supported by medical records; and 3) identification of the employees, business teams, and contractors Anthem relied upon to ensure compliance.  Anthem refused to provide the requested testimony.

The government argued that the requested testimony was relevant to its inquiry as to whether Anthem “knowingly disregarded its obligation to vet the validity of providers-submitted diagnoses codes ‘that were unsupported by the retrospective chart reviews’ and correct or withdraw the invalid codes.”  Importantly, and relying on the Ninth Circuit’s decision in Swoben, DOJ asserted that Anthem could not argue that the government’s FCA investigation “should be focused solely on Anthem’s chart review program… and not on whether or how it vetted the validity of provider-submitted diagnosis codes.”  The government further argued that such testimony was “not unreasonable” in part because Anthem had certified its good faith belief that the risk-adjustment data reported to CMS was accurate, complete, and truthful but had admitted that it did not implement any procedures to identify which provider-submitted diagnosis codes were not found by a medical records review.

Anthem raised procedural arguments in response, citing the government’s repeated refusal to meet and confer and to provide adequate notice, and argued the government’s proposed topics “were not proportional to the needs of the investigation.”  In particular, Anthem argued that it had thousands of contracted providers, each of which may have their own practices to assess the validity of codes provided to Anthem – potentially disparate practices that were arguably in scope for the requested deposition.

The Court evaluated the arguments by applying a four-part test applicable to requests to enforce Civil Investigative Demands under the FCA:  (1) whether the investigation will be conducted pursuant to a legitimate purpose, (2) whether the inquiry is relevant to the purpose, with deference given to the government’s appraisal of relevancy unless the government’s appraisal is “obviously wrong”, (3) whether the information sought is not already in the government’s possession, and (4) whether the administrative steps have been followed.   Anthem did not contend that factors (1), (3), and (4) were not met, and the Court found each was satisfied without further discussion.  As to the second factor, the Court found that “the government’s appraisal of the relevancy topics…is not obviously wrong,” the topics were “not too indefinite, given that the Government limited voluntarily their scope,” and the information sought was “reasonably relevant to the Government’s investigation.”  The Court also rejected Anthem’s arguments that compliance would be unnecessarily burdensome because the proposed topics were not proportional to the needs of the investigation, “especially in light of Anthem’s annual certification obligation concerning the accuracy and truthfulness of its risk-adjustment diagnosis data to CMS…and the economic impact of the potential fraud” under investigation.

As to Anthem’s procedural objection to DOJ’s refusal to meet and confer, the Court found that the FCA CID provision does not contain a meet-and-confer certification requirement comparable to the one contained in the Federal Rules of Civil Procedure and that importing the requirement from the Federal Rules “would not be consistent with the FCA and its remedial nature, as well as the Supreme Court’s directive that the FCA ‘should not be given [a] narrow reading.’”  In all events, the Court stated that letters exchanged between the parties “demonstrates that the Government engaged in good-faith meet-and-confer discussions with Anthem.”

The Court’s findings and recommendations may embolden DOJ in its efforts to pursue alleged FCA violations in the Medicare Advantage space, despite a recent ruling in the UnitedHealthcare case, discussed more here, which undercuts the DOJ’s efforts to bring FCA cases on the basis of potentially unsupported diagnosis codes for Medicare Advantage beneficiaries.

A copy of the court’s report can be found here.