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Constantine Cannon settles with one defendant in case alleging bilking of the Medicare Advantage program. Kaiser Foundation Health Plan of Washington (formerly Group Health Cooperative) will pay $6.375M.

Posted  November 17, 2020

Teresa Ross, a whistleblower represented by Constantine Cannon, and the Department of Justice have reached a settlement with Kaiser Foundation Health Plan of Washington (formerly Group Health Cooperative or GHC).  The Medicare Advantage Organization (MAO) has agreed to pay $6.375 million to resolve allegations that the insurance plan improperly collected money from the Medicare Advantage program by overstating how sick its beneficiaries were.

Under the Medicare Advantage program, also known as Medicare Part C, Medicare beneficiaries can obtain health care coverage through a managed care model. The program is facilitated through MAOs like GHC, private insurance plans that Medicare pays a monthly premium to provide health care coverage to their beneficiaries.  Medicare adjusts these premiums to reflect the health status of each beneficiary based on MAOs’ periodic reporting of their health information.  In general, Medicare pays MAOs more for sicker beneficiaries and less for healthier ones.

Unfortunately, this payment model creates an incentive to claim that beneficiaries are sicker than the medical records support.  The settlement resolves allegations that GHC knowingly submitted diagnoses that were not supported by the beneficiaries’ medical records to inflate the premiums paid to it by Medicare.  Specifically, it resolves allegations that GHC had improperly relied on coders’ interpretations of diagnostic tests, prescriptions, and entries in problem lists to come up with diagnoses and that it had submitted codes that were false because they were diagnosed by inappropriate providers, fell outside service year, or the patient had no evidence of a current condition.

Ms. Ross, a former employee of GHC, filed her qui tam lawsuit in federal court in Buffalo in 2012 under the False Claims Act, a law that allows whistleblowers to sue in the name of the United States and share in the recovery.  Because Medicare is federally funded, fraud against the Medicare program is fraud against the United States.

Additionally, Ms. Ross’s lawsuit alleges that another MAO, Independent Health; a Medicare Advantage vendor, DxID; and several individuals also defrauded the Medicare Advantage program in similar ways. Those allegations are not resolved by this settlement, and the United States has sought to intervene to assist Ms. Ross in pursuing them in court.

The False Claims Act is one of the most effective weapons in combatting fraud, waste, and abuse by those who do business with the U.S. Government. With the help of whistleblowers like Ms. Ross, the government recoups billions of dollars every year related to healthcare fraud. The False Claims Act entitles whistleblowers like Ms. Ross to receive a whistleblower reward of up to 30 percent of the government’s recovery.

In this case, the Ms. Ross will receive a reward of 25% of the government’s recovery, approximately $1.5 million. Ms. Ross is represented by Mike Ronickher and Max Voldman of Constantine Cannon. Constantine Cannon is the largest international law firm dedicated to representing whistleblowers, with offices in New York, London, San Francisco and Washington, D.C.

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Tagged in: FCA Federal, Healthcare Fraud, Managed Care, Medical Billing Fraud, Medicare, Risk Adjustment Fraud, Whistleblower Case, Whistleblower Rewards,