Feds join Medicare Advantage upcoding lawsuits against Kaiser

The federal government intervened in six lawsuits alleging that Kaiser Permanente upcoded claims for Medicare Advantage beneficiaries, the Justice Department said Friday.

The Oakland, Calif.-based integrated health system allegedly pressured its physicians to augment medical records often months after the care was provided to boost its Medicare reimbursement. Doctors added risk-adjusting diagnoses that patients did not have or were not addressed, the lawsuits claim.

“The federal government pays hundreds of billions of dollars every year to Medicare Advantage Plans,” Matt Kirsch, acting U.S. attorney for the District of Colorado, said in prepared remarks. “The District of Colorado will vigorously pursue investigations with our partners to make sure that money supports necessary healthcare, not fraud.”

Kaiser said it is confident that the company is compliant with MA requirements and will defend itself against the lawsuits alleging otherwise, noting nearly a decade of “strong performance” on CMS’ risk adjustment audits.

“Our medical record documentation and risk adjustment diagnosis data submitted to the Centers for Medicare & Medicaid Services comply with applicable laws and Medicare Advantage program requirements. Our policies and practices represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance from CMS,” the organization said in a statement.

Whistleblowers file qui tam lawsuits on behalf of the government, which can intervene, allow the whistleblower to pursue the claims and oversee the proceedings, or move to dismiss. It intervenes on fewer than 25% of whistleblower cases. Typically, the government only intervenes when there is a high likelihood of success and a potentially large settlement, legal experts said.

Federal authorities have opened several investigations into upcoding in the MA program, which continues to grow at a rapid rate. Freedom Health and Optimum Healthcare, for instance, agreed to pay $31.7 million in 2017 to settle MA-related upcoding charges. HHS’ Office of Inspector General issued a report in April that claimed that Humana overcharged CMS nearly $200 million for false or inflated claims.

MA reimbursement is based on regional trends and utilization in traditional fee-for-service Medicare as well as adjustments to plan members’ risk scores. Someone with chronic conditions has a higher risk score, and the government would pay the private health plan that covers the MA beneficiary more.

Risk scores were mean to incentivize plans to cover all seniors, not just the healthier ones. But an array of recent whistleblower lawsuits allege that health plans have been adding unnecessary codes or otherwise inflating scores to get more money.

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