Back To HEALTHCARE FRAUD
There is no bigger target for fraud than the Medicare Advantage program, which insures over half of Medicare-eligible beneficiaries.
Medicare Advantage is an alternative to traditional Medicare coverage for eligible seniors. Under traditional Medicare, known as Medicare Parts A and B, the government generally pays for specific treatments that a provider administers to patients. But with Medicare Advantage, known as Part C, the government pays insurers, referred to as Medicare Advantage Organizations (MAOs), a premium for each Medicare patient they insure. The New York Times reports that “[m]ost large insurers in the [Medicare Advantage] program have been accused in court of fraud.” Many of those cases allege that MAOs have engaged in “risk adjustment” fraud.
The opportunity for fraud arises because the monthly premium that Medicare pays MAOs is “risk adjusted” based on the beneficiaries’ health status. Medicare Advantage pays more for sicker patients, so the MAOs have a financial incentive to make their beneficiaries appear as unhealthy as possible. Some health care providers are similarly incentivized to maximize their patients’ diagnoses and therefore their reimbursement by Medicare.
In order to increase reimbursement, MAOs and health care providers often employ expert “coders” to make sure they document every possible diagnosis in medical records. As long as these diagnoses are accurate and supported by the medical chart, it is entirely permissible to do so. But the temptation to record diagnoses that the patient’s condition does not support offers a constant incentive to bend the rules. That’s where risk adjustment fraud comes in, and whistleblowers have played a dominant role in exposing it.
One of the most common ways to facilitate risk adjustment fraud is a profit-plumping practice known as “chart review.” In a chart review program, the MAO hires specialist coders to comb the medical charts of MAO subscribers to try to find additional diagnoses that the physician or health care provider did not record. The MAO submits these previously hidden diagnoses to Medicare for additional payment.
Those extra diagnoses cost Medicare between $12-25 billion per year. In one current case, the Justice Department says that a single large MAO, UnitedHealth, obtained an extra $7 billion over 9 years from such diagnosis harvesting.
But chart review is sometimes a one-way street. Whistleblowers have come forward in many cases to reveal that when the MAO coders find diagnoses the physician did not, the MAO seeks more money from Medicare. But when those same coders find a lack of support for diagnoses the physician recorded and for which the MAO was paid, the MAO keeps the money and says nothing to Medicare. This one-way flow of cash violates the rules of the Medicare Advantage program.
Similarly, some MAOs pressure health care providers to “find” as many diagnoses as possible to record on the patient’s medical chart. For example, the Justice Department has joined a whistleblower lawsuit against Kaiser Permanente, alleging that Kaiser pressed its physicians to create addenda to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have. This is a violation of Medicare requirements.
MAOs have tried to defend these profit-maximizing practices based on the claim that traditional Medicare pays more than Medicare Advantage to treat patients with similar health conditions. According to the MAOs, this violates a requirement that both programs should pay the same amount for equally sick patients. So far, the courts have rejected that claim, finding that the MAOs are not underpaid, and even if they were, the proper remedy is not to exaggerate the sickness of their subscribers to recoup the supposed shortfall.
But the MAOs have not given up. In the latest salvo, MAO Humana filed a case in Texas before Judge Reed O’Connor challenging Medicare’s rules for auditing MAOs, and once again raised the argument that compared to traditional Medicare, Medicare Advantage reimbursement “underpays” the MAOs. O’Connor is best known as the judge who overturned Obamacare as unconstitutional, a conclusion that the Supreme Court later rejected. According to Reuters, Judge O’Connor’s “courtroom has remained a favored venue for conservative and business interests that have made use of Texas federal court rules that allow plaintiffs effectively to pick judges by filing their cases in small divisions.” Judge O’Connor recently refused the government’s request to transfer the case.
Attorneys at Whistleblower Partners are keeping a close eye on the Texas case, because we represent one whistleblower, Benjamin Poehling, who has filed what appears to be the largest risk adjustment case in history. The defendant is the dominant MAO UnitedHealth Group, and the Justice Department is seeking billions of dollars in damages and penalties in the case. Like Humana, UnitedHealth has invoked the “underpayment” argument to defend its conduct.
But our interest in this area extends beyond the UnitedHealth case. Attorneys at Whistleblower Partners have represented whistleblowers in more major risk adjustment cases than any other firm. These include one of the very first risk adjustment cases, a $32.7 million settlement against Florida MAO Freedom Health, a settlement against Sutter Health for $96 million, a $6.3 million settlement against Independent Health and Group Health Cooperative, as well as a large pending case against Kaiser Permanente.
If you have knowledge of fraud in connection with the Medicare Advantage program and have questions about what to do about it, our attorneys would be pleased to speak with you on a confidential basis at no charge or obligation. Whistleblower Partners will continue to bring cases to keep MAOs honest and protect taxpayer funds that support Medicare for all seniors.
These descriptions of risk adjustment fraud are general in nature and do not constitute legal advice. Risk adjustment violations are complex and ever-evolving. The attorneys at Whistleblower Partners understand the complicated, constantly changing legal landscape and are happy to discuss any potential matter further.
If you would like more information or would like to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.
