Government Interests in False Claims Act Lawsuits Against Kaiser Permanente Affiliates for Submitting Incorrect Diagnostic Codes to Medicare Advantage | Takeover bid



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The United States has intervened in six complaints alleging that members of the Kaiser Permanente consortium violated the False Claims Act by submitting inaccurate diagnostic codes for its Medicare Advantage Plan registrants in order to receive higher reimbursements.

The members of the Kaiser Permanente (collectively Kaiser) consortium are Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group Inc. and Colorado Permanente Medical Group PC Kaiser is headquartered in Oakland, California.

“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care and that plans receive the appropriate compensation,” said the Assistant Deputy Attorney General Sarah E. Harrington of the Department’s Civil Division. “Today’s action sends a clear message that we will hold healthcare providers and plans accountable if they seek to outmaneuver the system by submitting false information. ”

“The integrity of government health care programs must be protected,” said Acting US Attorney Stephanie Hinds for the Northern District of California. “The Medicare Advantage program preserves the health of millions of people, and the wrongful acts that defraud the program cannot continue and will be prosecuted. “

“The federal government pays out hundreds of billions of dollars each year for Medicare Advantage plans,” said Acting US Attorney Matt Kirsch for the District of Colorado. “The District of Colorado will vigorously pursue investigations with our partners to ensure the money supports needed health care, not fraud.”

Under Medicare Advantage, also known as Medicare Part C, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA plans are paid an amount per person to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjust payments to MA plans based on the demographic information and diagnoses of each plan beneficiary. The adjustments are commonly referred to as “risk scores”. Typically, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a higher risk-adjusted payment to the MA plan for that beneficiary.

Medicare requires that, for outpatient medical visits, MA plans submit diagnoses to CMS only for conditions that required or affected the care, treatment, or management of patients when meeting in person during the year of service. In order to increase his Medicare reimbursements, Kaiser reportedly pressured his doctors to create addenda to medical records after meeting the patient, often months or more than a year later, to add diagnoses of adjustment for risks that patients did not actually have and / or were not. considered or treated during the encounter, in violation of Medicare requirements.

The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private parties to sue on behalf of the government for false claims and to receive a share of any recoveries. The False Claims Act also allows the government to intervene in such lawsuits, as it has done, in part, in these cases. Cases are grouped together in the Northern District of California and captioned United States ex rel. Osinek v. Kaiser Permanente, 3: 13-cv-03891 (ND Cal.); United States ex rel. Taylor vs. Kaiser Permanente, et al., 3:21-cv-03894 (ND Cal.); United States ex rel. Arefi, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3: 16-cv-01558 (ND Cal.); United States ex rel. Stein, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3: 16-cv-05337 (ND Cal.); United States ex rel. Bryant v. Kaiser Permanente, et al., 3: 18-cv-01347 (ND Cal.); and United States ex rel. Bicocca c. Med. Permanente Group, Inc., et al., No.3: 21-cv-03124 (ND Cal.).

This case was investigated by the Commercial Litigation Division of the Civil Division, the Fraud Section, and the United States Attorney’s Offices for the Northern District of California and the District of Colorado, along with the help from HHS-OIG.

The claims in which the United States intervened are claims only and there has been no determination of liability.

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