Independence Blue Cross (IBX) has agreed to pay $22.5 million to the United States to resolve a whistleblower lawsuit, United States ex rel. Crawford v. Independence Blue Cross, No. 20-cv-5818 (E.D. Pa.), concerning the risk adjustment data it submitted to the Centers for Medicare & Medicaid Services (CMS) for its Medicare Advantage (MA) plans. Of that amount, $11.25 million is designated as restitution, and the relator, a former IBX risk adjustment director, will receive $3,825,000 as her share.
What the Relator Alleged in the Complaint
The qui tam complaint, filed under seal on November 18, 2020, by Suzanne Crawford, alleged that IBX ran three retrospective chart review programs (the vendor-run “CARA Program,” the internal “IBX Review,” and an “EMR Data Exchange Program”) that searched medical records only for additional diagnosis codes to submit to CMS, while ignoring and failing to delete previously submitted codes the records did not support. The relator characterized these as one-way “code harvesting” programs, alleged that IBX’s own internal audits showed inaccuracy rates of 10–15%, and estimated, “upon information and belief,” that the practice generated $20 million or more per year in additional revenue.
The complaint asserted presentment, false statement, and “reverse false claim” counts under the False Claims Act (FCA), premised largely on IBX’s annual attestations that its risk adjustment data were “accurate, complete, and truthful.” These are the relator’s allegations only; they were never proven in court.
What the Government Contends in the Settlement Agreement
The settlement’s recitals set out the United States’ contentions, which are narrower than the complaint. The “Covered Conduct” is limited to the IBX Review program for dates of service 2016–2020 (payment years 2017–2021).
According to the recitals, IBX used nurse chart reviews to submit additional diagnosis codes that providers had not reported, but the government contends that those same reviews failed to substantiate some provider-reported codes, which IBX did not investigate or withdraw before certifying its data to CMS. Importantly, the agreement expressly states that it is neither an admission of liability by IBX nor a concession by the government that its claims are not well-founded. IBX denies both the government’s contentions and the allegations in the complaint.
Key Settlement Terms
In addition to the $22.5 million payment (plus 4.25% annual interest from September 6, 2026, until paid), the government releases IBX from civil and administrative monetary claims for the Covered Conduct under the FCA, the Civil Monetary Penalties Law, the Program Fraud Civil Remedies Act, and related common law theories, while reserving claims involving criminal liability, exclusion, and individual liability, among other claims.
IBX also agreed not to resubmit or appeal denied diagnoses related to the Covered Conduct, and the case will be dismissed with prejudice as to the relator and as to the Covered Conduct for the United States.
Why This Matters for Risk-Bearing Providers
This settlement is the latest in a growing line of government enforcement actions focused on MA risk adjustment. Its central theory, that a chart review focused only on “additions” without also identifying “deletions” can support FCA liability, extends beyond health plans to risk-bearing providers and other healthcare organizations.
Provider groups, Management Service Organizations (MSOs), Accountable Care Organizations (ACOs), and other organizations that take on downstream risk, run coding or chart review programs, or share in risk adjustment revenue may face similar scrutiny, including from whistleblowers within their own coding and analytics teams.
Risk-based providers should confirm that retrospective reviews and “suspecting” programs are two-sided, unsupported codes are promptly corrected, identified overpayments are returned within 60 days of identification, and internal audit findings are acted upon and documented.
How Frier Levitt Can Help
Frier Levitt advises Medicare Advantage organizations, risk-bearing provider groups, MSOs, ACOs, and other healthcare entities on risk adjustment compliance, coding and documentation practices, internal audits, and government investigations. Our attorneys help clients identify and address potential compliance risks, respond to audit findings, and navigate False Claims Act allegations and enforcement actions. Contact Frier Levitt to discuss how we can help your organization evaluate its risk adjustment practices and mitigate potential regulatory and enforcement exposure.
