Health Services Company Settles False Claims Act Allegations
Commentary by Jason S. Kanterman
A global health services company settled charges with the DOJ to resolve a series of False Claims Act actions being pursued by numerous U.S. attorney’s offices across the country.
Before the United States District Court for the Middle District of Tennessee, the U.S. attorneys alleged that the health services company knowingly submitted false and invalid diagnoses of "serious, complex medical conditions" of its Medicare Part C enrollees. The DOJ also alleged that the company falsely certified that the diagnosis data it submitted to CMS on an annual basis was "accurate, complete, and truthful." The company then allegedly submitted and refused to withdraw the inaccurate diagnosis data to extract inflated payments from the Centers for Medicare and Medicaid Services ("CMS").
To settle the charges, the company agreed to a settlement amount of $172,294,350.
Commentary
Under the Medicare Advantage Program (Medicare Part C), beneficiaries may elect to obtain their Medicare-covered benefits through private insurance plans called Medicare Advantage Plans. When a covered beneficiary elects to go the Medicare Advantage route, the Government pays the private Medicare Advantage Plan a fixed monthly fee (subject to adjustment) for the service. Medicare Advantage plans make money when they pay less in benefits than they receive in government funding.
While the False Claims Act has long been used to prosecute healthcare fraud, its application in the Medicare Advantage space is more recent. That said, Medicare Advantage programs are fast becoming a primary target for False Claims Act litigation and enforcement efforts, particularly where more and more of the nation’s Medicare beneficiaries opt to enroll in these plans. According to government estimates, more than half of the country’s Medicare beneficiaries participate in Medicare Advantage plans, with the government paying out more than $450 billion per year to these private plan administrators. With such significant sums at play, it should come as little surprise that private whistleblowers and government agencies are keenly focused on rooting out fraud from within the Medicare Advantage program. Expect Medicare Advantage to be a top-5 area of False Claims Act focus in the years to follow.