Category

Overpayments

20 March 2020

DOJ Declines to Intervene in Risk Adjustment Qui Tam Suit Brought Against Numerous Medicare Advantage Plans

On March 6, 2020, the United States District Court for the Central District of California unsealed a qui tam complaint filed in May 2018 against Mobile Medical Examination (“MedXM”) and a number of Medicare Advantage Organizations (“MAOs), including, United Healthcare, Wellpoint, Aetna, Health Net, and Molina Healthcare.  The qui tam suit, which was brought by former employees of MedXM, alleged that the defendants engaged in a scheme to submit false claims for payment to the federal healthcare programs by inflating risk adjustment payments and providing kickbacks to MA enrollees.  The Department of Justice declined to intervene in the suit. (more…)

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18 December 2019

OIG Report Raises Concerns About Medicare Advantage Organizations Using Chart Reviews to Obtain Billions of Dollars in Inflated Risk-Adjusted Payments

On December 10, 2019, HHS-OIG issued a report examining the extent to which Medicare Advantage Organizations (“MAOs”) leverage chart reviews to increase risk-adjusted payments. OIG undertook its review due to concerns that MAOs “may use chart reviews to increase risk adjusted payments inappropriately.” Based on its analysis, OIG estimated that MAOs received approximately $6.7 billion in additional payments based on codes added during chart reviews. While OIG did not conclude that these payments constituted overpayments, it raised concerns about “the completeness of payment data submitted to CMS, the validity of diagnoses on chart reviews, and the quality of care provided to beneficiaries.”

(more…)

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11 September 2019

DOJ Defends Medicare Advantage Upcoding Claims Against Sutter

On August 28, 2019, the United States filed a brief in opposition to Sutter’s June 14, 2019 motion to dismiss the Department of Justice’s Complaint-in-Intervention in a False Claims Act suit alleging Sutter knowingly submitted and caused the submission of unsupported diagnosis codes for Medicare Advantage Organization (MAO) patients in order to inflate Medicare reimbursements.  On the same day, the Relator, Kathy Ormsby, also filed a similar brief in opposition to Sutter’s motion to dismiss.  We previously discussed Sutter’s motion to dismiss here and the Department of Justice’s Complaint-in-Intervention here.

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22 August 2019

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.

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21 August 2019

District Court Dismisses FCA Suit in Medicare Advantage Upcoding Case

On August 6, 2019, the United States District Court for the Western District of Texas granted a motion to dismiss filed by Baylor Scott & White Health (“Baylor”), a network of inpatient short-term acute care hospitals, in a False Claims Act suit alleging that Baylor submitted “more than $61.8 million in false claims” by upcoding certain diagnosis codes.  The Court dismissed all claims with prejudice, finding that the Relator, Integra Med Analytics LLC, alleged only “naked assertions devoid of further factual enhancement” that were “insufficient under Rule 8’s pleading standards.”  The Department of Justice declined to intervene in the suit.

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22 July 2019

D.C. Circuit Rejects Expansive Theory of FCA Liability Predicated on Failure to Pay an Unassessed Penalty

On July 5, 2019, the D.C. Circuit affirmed the dismissal of a qui tam lawsuit against several chemical manufacturers alleging that they violated the False Claims Act by failing to pay civil penalties owed under the Toxic Substances Control Act, 15 U.S.C. §§ 2601 (1976) (“TSCA”) for the manufacturers’ repeated failures to report “information regarding the dangers of isocyanate chemicals” to the EPA.  The law firm Kasowitz Benson Torres LLP, which is the relator in the case, urged the D.C. Circuit “to become the first court to recognize FCA liability based on the defendants’ failure to meet a TSCA reporting requirement and on their failure to pay an unassessed TSCA penalty.” The D.C. Circuit declined that invitation.

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28 June 2019

Sutter Health Files Motion to Dismiss Criticizing DOJ’s Outdated FCA Theories in Medicare Advantage Case

On June 14, 2019, Sutter Health (“Sutter”) filed a Motion to Dismiss the Department of Justice’s Complaint-in-Intervention in a False Claims Act suit alleging Sutter knowingly submitted and caused the submission of unsupported diagnoses codes for Medicare Advantage patients in order to inflate Medicare reimbursements.  The Department of Justice filed its Complaint-in-Intervention on March 4, 2019, which we previously discussed here.

(more…)

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03 April 2019

District Court Relies on Azar’s Overruling of Overpayment Rule to Deliver Another Blow to DOJ’s MA Enforcement Efforts

On March 29, 2019, the United States District Court for the Central District of California denied the Department of Justice’s Motion for Partial Summary Judgment against UnitedHealth Group (“United”) in a False Claims Act suit alleging that United knowingly retained overpayments for unsupported diagnosis codes submitted for Medicare Advantage patients.  In reaching its decision, the Court relied on the decision by the United States District Court for the District of Columbia to vacate a portion of CMS’s 2014 Final Overpayment Rule applicable to the Medicare Advantage program in UnitedHealthcare Insurance Co. v. Azar, 330 F. Supp. 3d 173 (D.D.C. 2018), which we previously discussed here.

(more…)

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08 March 2019

DOJ Files Complaint-in-Intervention in Medicare Advantage Case Against Sutter Health

On March 4, 2019, the Department of Justice filed its Complaint-in-Intervention against Sutter Health (“Sutter”) and its affiliate Palo Alto Medical Foundation (“PAMF”) in a False Claims Act suit alleging that the Defendants knowingly submitted and caused the submission of unsupported diagnosis codes for Medicare Advantage patients in order to increase reimbursements from Medicare.  DOJ had previously announced its decision to intervene on December 11, 2018, as we previously discussed here.

(more…)

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14 December 2018

DOJ Intervenes in Medicare Advantage FCA Case Against Provider

On December 11, 2018, the Department of Justice announced that it has intervened in a False Claims Act suit against Sutter Health and its affiliate Palo Alto Medical Foundation.  The suit, originally filed in March 2015 by a former Risk Adjustment Manager at Palo Alto Medical, alleges that Sutter knowingly submitted unsupported diagnosis codes for Medicare Advantage patients in order to increase reimbursements from Medicare. (more…)

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