On July 30, 2021, the United States intervened in six complaints alleging that members of a healthcare consortium violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to receive higher reimbursements.
Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA Plans are paid a per-person amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare & Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the diagnoses of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Medicare requires that for outpatient medical encounters, MA Plans submit diagnoses to CMS only for conditions that required or affected patient care, treatment, or management during an in-person encounter in the service year. In order to increase its Medicare reimbursements, the healthcare consortium allegedly pressured its physicians to create addenda (i.e., additional material) to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements.
Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department Civil Division stated, “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. Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”
The lawsuits were filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in part, in these cases.
The claims in which the United States has intervened are allegations only, and there has been no determination of liability as of yet.
Issue:
Members of the healthcare team who are involved in billing and coding must be knowledgeable and understand the importance of accurate billing and coding. All members of the healthcare team should be aware of what may be considered a false claim. Ensure that all staff are aware that these violations can occur whether they are intentional or not. Failure to promptly report a false claim can result in lawsuits, fines, and other sanctions. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 1 Compliance and Ethics Program, CP 2.3 General Legal Duties and Antitrust Laws.
Discussion Points:
- Review policies and procedures for preventing and reporting a false claim violation. Ensure that your procedure includes instruction on requirements for proper coding of diagnoses. Update your policies and procedures as needed.
- Train all staff on the False Claims Act and what can be considered a false claim. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect a false claim has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
