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Medicare Risk Adjustment Fraud is Not Victimless

Posted  June 18, 2020
By Edward Baker

Implicit in the arguments made by many Medicare Advantage Organizations (MAOs), health plans, hospital networks and other defendants in response to whistleblower and government False Claims Act complaints is that the alleged misconduct—falsifying diagnosis data so that CMS overpays for patients enrolled in an MA plan—involves just a technical record-keeping or administrative dispute with CMS and no actual victims.

Risk Adjustment Fraud Has Victims

Nothing could be farther from the truth.  In fact, Medicare risk adjustment fraud does involve victims.  They include:  (1) millions of Medicare patients who fail to receive proper medical care because their healthcare providers are more focused on what diagnosis codes they must enter to increase patient risk scores rather than cure illnesses; (2) physicians and clinicians who are caught between the noble ideals of their profession and business pressure to help MAOs chase profits; and (3) whistleblowers, frequently coders, auditors, or clinicians, who are retaliated against for striving to create a true culture of compliance by submitting “accurate, complete, and truthful” diagnosis data, not just codes that will increase MAO profits.

Anthem’s Motion to Transfer Venue

The failure of MAOs and their affiliates to acknowledge the victims of risk adjustment fraud is apparent in a motion recently submitted by Anthem, Inc., one of the largest MAOs in the country, in response to an FCA complaint filed in late March by Geoffrey Berman, the U.S. Attorney for the Southern District of New York.  Similar to allegations made by more than a dozen whistleblowers against other MAOs, health plans, and other defendants in the past ten years, the United States alleges that Anthem knowingly failed to delete inaccurate diagnosis codes that it submitted to CMS for risk-adjustment purposes.  In its letter to the Court, Anthem asks that the matter be transferred to Ohio, partly on the basis that the “only apparent connection” between the Southern District of New York and the United States’ claims is that “Plaintiff’s attorneys work here.”

The United States’ Response

As the United States points out in response, however, Anthem ignores the fact that “one of [its] largest Medicare Advantage plans, Empire MediBlue HMO, operated in [New York] and is part of the alleged fraud.”  And each year, “Anthem submitted claims to Medicare for tens of thousands of New Yorkers enrolled in Empire MediBlue and received hundreds of millions of dollars in risk-adjustment payments.”  Moreover, Anthem “sent flyers and other communications to healthcare providers in [New York] to misrepresent the purpose and structure of its chart review program—falsely suggesting that it would verify the accuracy of diagnosis data through chart review while actually intending to turn a blind eye to inaccurate data.”

Anthem’s hubris in failing to acknowledge the “tens of thousands” of Medicare patients who have been impacted in New York by its alleged fraudulent scheme, let alone the physicians and other healthcare providers who were allegedly lied to about the purpose of Anthem’s chart review program, is striking.  The United States’ allegations, if proven, will establish, yet again, that Medicare Advantage risk adjustment fraud is not victimless.

If you would like more information about Medicare or Medicaid managed care fraud or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.

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Tagged in: FCA Federal, Healthcare Fraud, Medicare, Provider Fraud, Risk Adjustment Fraud,


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