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Constantine Cannon LLP Announces $6.375 Million Medicare Advantage Whistleblower Settlement with Group Health Cooperative

Posted  November 17, 2020

The settlement is the latest in a series of high profile Medicare Advantage fraud cases brought forward by whistleblowers.

Constantine Cannon LLP is pleased to announce that its whistleblower client’s claims have resulted in a $6.375 million settlement with Group Health Cooperative (GHC). The whistleblower exposed an alleged risk-adjustment scheme designed to artificially inflate the reimbursement provided under Medicare Part C (known as Medicare Advantage). GHC is now a subsidiary of Kaiser Permanente.

The qui tam, or whistleblower, lawsuit alleged that GHC hired an outside vendor to review and “improve” its risk adjustment scores after going from an operating income of almost $57 million to an operating loss of $60 million over a several-year period. The suit alleged that GHC hired these vendors through a contingent payment model that meant that both parties were incentivized to find new revenue, rather than follow the rules. According to the whistleblower, despite qualms about the alleged impropriety of the coding policies applied by the vendor, GHC submitted these allegedly unsupported claims to Medicare in support of millions of dollars of additional Medicare Advantage insurance payments.

The Department of Justice has a pending motion to intervene on the whistleblower’s behalf against the other defendants in the case, which include the coding review vendor and its corporate parent.

The whistleblower, Teresa Ross, was a first-hand witness to GHC’s submission of these alleged improper diagnoses. In her role overseeing GHC’s own internal audit and review processes for risk adjustment claims, Ross saw GHC adopt these questionable practices that produced thousands of new diagnoses.

“This case is the latest example of the Department of Justice’s broad effort to reign in Medicare Advantage fraud,” said Michael Ronickher, a Partner at Constantine Cannon. “The DOJ needs whistleblowers like Ms. Ross to continue being the vigilant eyes and ears needed to expose fraud within the nation’s most prominent insurers.”

“We’ve seen countless schemes to bilk taxpayers through Medicare Advantage brought to light by whistleblowers who have risked everything by coming forward,” said Max Voldman of Constantine Cannon. “The False Claims Act allows whistleblowers to serve as the first line of defense against risk adjustment schemes. This case encapsulates the invaluable alliance between whistleblowers and law enforcement fighting Medicare fraud.”

The False Claims Act (FCA) is one of the government’s most effective weapons in combating fraud and waste of government funds by private companies who contract with the government. The FCA allows whistleblowers to sue companies that are defrauding the government and receive as an award a percentage of any government recovery. Healthcare fraud alone costs the U.S. billions of dollars; since fraud can be difficult to discern without access to inside information; well-placed whistleblowers are necessary to provide information the government might otherwise lack to help stop these practices.

About Constantine Cannon LLP

Constantine Cannon has the world’s largest international whistleblower practice, with offices in New York, Washington, D.C., San Francisco, and London. The firm’s team of dedicated whistleblower lawyers represent whistleblowers under federal and state False Claims Acts as well as the whistleblower programs of the IRS, SEC, CFTC, DOT, and others.

Constantine Cannon’s experience spans across multiple practice areas that include antitrust and complex commercial litigation, whistleblower representation, government relations, securities, and e-discovery. The firm’s antitrust practice is among the largest and most well recognized in the nation.

PRCG | Haggerty
Isaac Benjamin
(212) 683-8100