Medicare Advantage, also known as Medicare Part C, has grown to the point where more than half the country’s Medicare beneficiaries are enrolled in Medicare Advantage Plans. The Government pays private insurers over $450 billion annually to Medicare Advantage Plans.
Medicare Advantage is not a pay-for-service coverage paradigm, like traditional Medicare. Under the Medicare Advantage program, the Centers for Medicare & Medicaid Services (“CMS”) makes monthly payments to Medicare Advantage Plans based on various “risk” factors that account for the anticipated health expenditures for each beneficiary. CMS pays Medicare Advantage Plans more per member per month for sicker beneficiaries who are expected to incur higher healthcare costs. CMS relies on Medicare Advantage Plans or Providers to submit diagnosis codes that CMS uses to determine the health status of enrollees.
Consistent with the growth of the Medicare Advantage program, the submission of false codes (or “upcoding”) seems to be happening with high frequency. The U.S. Department of Health and Human Services Office of the Inspector General (“HHS-OIG”) recently published the results of an audit,[1] and the results were shocking. In a sample of 211 enrollees of a particular Medicare Advantage Plan 198 lacked medical records supporting the diagnosis codes submitted to CMS, representing a 93.8% rate of improper coding. Per regulation, Plans must certify that the codes submitted to CMS are accurate, and downstream providers, in turn, must certify to Medicare Advantage Organizations (“MAOs”) that their coding (used by the MAOs) is complete and accurate. A 93.8% rate of inaccuracy shows that obtaining inflated payments from the Government is more likely the result of intentional wrongdoing rather than innocent oversight.
Just last week, the Department of Justice (“DOJ”) issued a press release stating that Cigna Group is paying $172,000,000 to settle False Claims Act (“FCA”) suits alleging that Cigna submitted untruthful diagnosis codes to obtain inflated payments from CMS.[2] One portion of the claims were brought to the attention of the Government by a whistleblower who is set to receive more than $8,000,000 as part of the settlement. To help the Government uncover fraud, a whistleblower can file an action on behalf of the United States under the FCA and receive a portion of any recovery.
How can Frier Levitt help?
Frier Levitt attorneys have experience handling False Claims Act / Whistleblower cases and represent clients in the Medicare Advantage space. If you have first-hand knowledge of a Plan or Provider that is not accurately reporting diagnosis codes for Medicare Advantage beneficiaries, we can discuss the options available to you.
[1] https://oig.hhs.gov/oas/reports/region7/72001197.asp
[2] https://www.justice.gov/opa/pr/cigna-group-pay-172-million-resolve-false-claims-act-allegations
