Medicare Advantage Providers Pay $5M to Settle FCA Allegations Relating to Unsupported Diagnosis Codes

On August 8, 2019, Beaver Medical Group L.P. (“Beaver”) and a Beaver-affiliated physician, Dr. Sherif Khalil, agreed to pay a combined total of $5 million to resolve allegations that the providers knowingly submitted diagnosis codes that were not supported by the medical records in order to inflate reimbursements from Medicare.  The qui tam action was brought by a former employee of Beaver, Dr. David Nutter, and DOJ intervened.  The settlement reflects DOJ’s continuing efforts to use its enforcement power to pursue fraud in the Medicare Advantage space despite recent setbacks in the UnitedHealthcare Insurance Co. v. Azar, 330 F. Supp. 3d 173 (D.D.C. 2018), which vacated a portion of CMS’s 2014 Final Overpayment Rule applicable to the Medicare Advantage program, previously discussed here.  Indeed, in its press release, DOJ emphasized that preventing Medicare Advantage fraud remains a top priority:  “As enrollment in Medicare Advantage continues to grow, investigation into accuracy of diagnosis data becomes ever more important….Those who inflate bills sent to government health programs can except to pay a heavy price.”  We will continue to monitor and provide updates on these issues as they develop.

DOJ’s press release can be found here.