Medicare Advantage Provider to Pay Up To $98M to Settle False Claims Act Suit

In a press release published on December 20, the U.S. Department of Justice (DOJ) announced that New York-based Independent Health has agreed to pay up to $98 million in violation of the False Claims Act by knowingly submitting invalid diagnosis codes to Medicare for Medicare Advantage plan enrollees to increase payment.

According to the news brief, Independent Health allegedly created a wholly owned subsidiary, DxID LLC, to retrospectively search medical records and query physicians for information that would support additional diagnoses that could be used to generate higher risk scores. The United States filed a complaint alleging that, from 2011 through at least 2017, Independent Health, with the assistance of DxID and its founder and chief executive, Betsy Gaffney, knowingly submitted diagnoses to CMS that were not supported by the beneficiaries' medical records to inflate Medicare's payments to Independent Health.

"Today's result sends a clear message to the Medicare Advantage community that the United States will take appropriate action against those who knowingly submit inflated claims for reimbursement," Deputy Assistant Attorney General Michael Granston of the Justice Department's Civil Division said in a statement.

"Medicare Advantage Plans that attempt to game federal programs for profit must be held accountable through rigorous oversight and enforcement," said Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG) in a statement.