(CN) — Kaiser Permanente, one of the largest non-profit health care plans in the country, stands accused of defrauding the Medicare Advantage program by encouraging physicians to submit inaccurate diagnosis codes for its enrollees to increase the plan’s reimbursement.
The Medicare Advantage program, otherwise known as Medicare Part C, allows beneficiaries to enroll in its managed care insurance plans. Participating health plans are paid a per-person fee based on services provided and on the health status of its individual enrollees.
Enrollees receive a “risk assessment score” by the Centers for Medicare and Medicaid Services (CMS), essentially grading them based on demographic data and their own health diagnoses. The higher a person’s risk score, the more a given health plan gets paid to insure them.
It’s that risk score that Kaiser is accused of ginning up to increase its Medicare payouts.
“The integrity of government health care programs must be protected,” Acting U.S. Attorney Stephanie Hinds of the Northern District of California said in a statement on the government's motion to intervene. “The Medicare Advantage program maintains the health of millions, and wrongful acts that defraud the program cannot continue and will be pursued.”
According to Medicare rules, participating plans must submit diagnoses for outpatient care to CMS only for conditions requiring or affecting patient care or treatment during in-person encounters that occurred during the service year. The lawsuits accuse Kaiser of pressuring its physicians to add information to patient records long after their visit or treatment took place, sometimes over a year later, to inflate patients’ risk scores through new diagnoses that were never presented to the patients or addressed during their visit in violation of Medicare rules.
“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division in the statement. “Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”
The six original lawsuits the feds want consolidated were filed under the whistleblower provisions of the False Claims Act, which allows private individuals to sue an entity on behalf of the federal government for fraudulent activity and to collect a share of any money recovered. The government is also permitted under the act to intervene, as it has, at least partially, in this instance by consolidating the original cases in the Northern District of California.
In a statement on its website late Thursday, Kaiser said it is "confident that Kaiser Permanente is compliant with Medicare Advantage program requirements and we intend to strongly defend against the lawsuits alleging otherwise."
The health care giant added its policies and practices "represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance from CMS. For nearly a decade, Kaiser Permanente has achieved consistently strong performance on risk adjustment data validation audits conducted by CMS. With such a strong track record with CMS, we are disappointed the Department of Justice would pursue this path.”
A Justice Department spokesperson did not respond to a request for comment by press time.
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