DOJ Intervenes in Whistleblower Cases Alleging Medicare Fraud
Six cases in Colorado and California alleged that Kaiser Permanente committed Medicare fraud in its Medicare Advantage risk adjustment processes.
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- The Department of Justice (DOJ) will intervene in the case of six whistleblower lawsuits against Kaiser Permanente regarding Medicare Advantage diagnosis codes and alleged Medicare fraud.
The lawsuits argued that, months or more than a year after patients’ encounters took place, Kaiser Permanente pushed providers to submit information that would demand a risk adjustment. The information may include conditions that the patients did not have or that providers did not examine during the encounters.
“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Sarah E. Harrington, deputy assistant Attorney General of the Justice Department’s Civil Division.
“Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”
The six lawsuits originally fell under the jurisdiction of the Civil Davison’s Commercial Litigation Branch, Fraud Section as well as the U.S. Attorney’s Offices for the Northern District of California and the District of Colorado. However, as the DOJ steps into the case, the lawsuits will continue under the U.S. Attorney’s Offices for the Northern District of California.
“The federal government pays hundreds of billions of dollars every year to Medicare Advantage Plans,” said Matt Kirsch, acting U.S. attorney for the District of Colorado. “The District of Colorado will vigorously pursue investigations with our partners to make sure that money supports necessary health care, not fraud.”
Kaiser Permanente defended its actions and expressed disappointment in the DOJ’s decision to intervene.
“We are confident that Kaiser Permanente is compliant with Medicare Advantage program requirements and we intend to strongly defend against the lawsuits alleging otherwise,” Kaiser Permanente responded in a statement.
The payer pointed to its overall track record on Medicare Advantage compliance in the public statement.
“For nearly a decade, Kaiser Permanente has achieved consistently strong performance on Risk Adjustment Data Validation audits conducted by CMS,” Kaiser Permanente stated. “With such a strong track record with CMS, we are disappointed the Department of Justice would pursue this path.”
There are numerous ways in which a payer could come under investigation for risk adjustment fraud.
In March 2020, the DOJ initiated a lawsuit against Anthem for potential risk adjustment fraud. The DOJ argued that the payer failed to delete inaccurate diagnoses, which could boost its reimbursement payments.
This case also involved a payer that attempted to enable providers to include retrospective data. Anthem stated that it had designed the process for the sake of oversight, however the DOJ lawsuit argued that the results of the retroactive data collection were not available to CMS until after the payer could correct its patients’ charts.
The DOJ stated that Anthem gained $100 million or more by pursuing this course of action.
As of the date of this publication, Anthem’s case is still ongoing.
Kaiser Foundation Health Plan—a Kaiser Permanente health plan—had to pay more than $6.3 million in November 2020 when it acquired Group Health Cooperative. The acquired company submitted diagnoses to CMS without evidence.
The whistleblower, a former employee of the acquired company, received $1.5 million as part of the settlement.
At the time, Kaiser Permanente told HealthPayerIntelligence that the payer had a record of compliance in risk adjustment payments. The payer never admitted to its liability and stood by Group Health Cooperative’s decisions as well.
The Medicare Advantage risk adjustment model is in the midst of a shift towards encounter data, as opposed to CMS Risk Adjustment Processing System (RAPS) data. The encounter data provides both diagnoses as well as products and services that were involved in treatment. The shift will be complete in plan year 2022.
