Medicare Advantage, also known as Medicare Part C, has become the country’s largest taxpayer-funded health insurance program with more than 31 million participants. But as annual expenditures for the program have tripled over the past decade to $450 million, fraud is on the rise as well.
According to a New York Times report, the Department of Justice and whistleblowers have pursued False Claims Act cases against at least half of the top 10 Medicare Advantage providers. Also, the U.S. Department of Health and Human Services Office of the Inspector General has found at least eight of those 10 private insurers have overbilled Medicare.
“Fraudsters follow the money,” HHS Inspector General Christi A. Grimm said in recent congressional testimony. “With the tremendous growth of Medicare Advantage enrollment and expenditures, a corresponding increase in fraud in Medicare Advantage is predictable. Fraud schemes in traditional Medicare have migrated to Medicare Advantage.”
One of those schemes that threatens the financial health of Medicare Advantage, according to Grimm, is risk adjustment fraud. Whereas in traditional Medicare the government is paying providers for each medically necessary need or service that’s covered by the plan, in Part C the government pays private insurance plans a fixed monthly payment per each Medicare Advantage enrollee to cover their needs.
That fixed monthly payment can be increased, however, through risk adjustment payments, which provide private insurers an additional amount above the fixed monthly payment to account for specific needs of Medicare Advantage enrollees and discourage plans only enrolling healthier people. The Centers for Medicare & Medicaid Services bases risk adjustment payments on enrollee diagnoses contained in encounters or claims that Medicare Advantage plans submit. If a beneficiary is diagnosed with cancer, for example, the plan will receive a higher payment as long as the patient has a cancer diagnosis in their medical record.
As Grimm said, however, the Medicare Advantage plans stand to benefit financially when the monthly payment from the government exceeds their costs to provide care to the enrollee. That health care plans could overstate how sick their enrollees are to pocket higher Medicare Advantage reimbursements and not to provide patient care is a “troubling concern,” according to Grimm. A 2021 HHS-OIG report, Grimm said, raises serious questions when health risk assessments or chart reviews are the sole source of diagnoses driving higher risk adjustment payments.
She said HHS-OIG found that Medicare Advantage companies received more than $9 billion in risk adjustment payments in one year for serious medical conditions that only appeared on health risk assessments or chart reviews and not on any service records: 20 Medicare Advantage companies accounted for $5 billion of that $9 billion.
The most common diagnoses driving these payments, Grimm said, included vascular disease, serious mental illness, chronic obstructive pulmonary disorder, and congestive heart failure. A review of service records did not show any treatments indicating these serious conditions, she said.
Keller Grover attorneys have unique experience in risk adjustment fraud and a proven track record of getting the government’s attention to address it. We represented the whistleblower whose information led to a $90 million payout by Sutter Health, a precedent-setting settlement against a hospital system involving allegations of fraud on the Medicare Advantage program.
In that case, the whistleblower was a Certified Coder and risk adjustment manager who alleged Sutter artificially inflated its reimbursements for Medicare Advantage enrollees, claiming patients were treated for conditions they either did not have or were not treated for, which increased their risk scores and how much the government reimbursed Sutter for their care.
In another case last year, Cigna agreed to pay $172 million to resolve allegations that it violated the False Claims Act after it was accused of submitting inaccurate diagnoses codes based on health risk assessments and chart reviews for its Medicare Advantage enrollees.
Oftentimes, whistleblowers are the only ones who can speak up and stop these types of frauds that cheat taxpayers and patients. When a FCA case is successful, the whistleblower typically receives a portion of the fraud recovered, ranging between 15% and 30%. In fiscal year 2023, the government paid $350 million to whistleblowers.
If you have information about risk adjustment fraud or other fraud in Medicare Part C, contact Keller Grover for a confidential, free consultation. We can advise potential whistleblowers about the best path forward from the very beginning, helping minimize the impact of reporting, protect rights and achieve the best possible outcome for the situation.