Medicare Advantage Risk Score Fraud and the False Claims Act

Are you aware of doctors or health plans upcoding patients enrolled in Medicare Advantage plans? Medicare loses billions every year to errors in the calculation of the risk score for patients and your information is needed to stop it. Reporting risk adjustment fraud through a whistleblower lawsuit under the False Claims Act may also entitle you to receive a reward from the money that the U.S. Government recovers because of your information.

Medicare Advantage fraud has been described as the False Claims Act’s “Next Frontier” in at least one news article in the legal industry. It speculates that there are a decent number of cases “under seal.” These cases have not been publicly released and are still under investigation by the Department of Justice.  Only a handful of cases involving MA plans have been unsealed so far. More are expected when there has been adequate time from the initiation of the system, just over 10 years ago. It can take some time for companies to begin committing fraud and a resulting whistleblower lawsuit to reach the public eye.

Potential Violations of the False Claims Act

CMS estimates that Medicare Advantage improperly paid out $13.1 billion in 2013 due to errors in the calculation of the risk score.

Upcoded Patient Illnesses

Several health plans have also been accused of turning a blind eye to doctors specifically visiting patients with a Medicare Advantage plan and reporting that they are sicker than they actually are during the visit.

Unsupported Diagnoses

CMS bases its risk score calculation for the patient on the information provided by the Medical Advantage plan.  The plan must have adequate documentation of all diagnoses that it submits to CMS.  Medicare relies on the information provided by the health plan as it does not require the plan to submit supporting documentation.

Retrospective Reviews

The plans act improperly if it reviews files for missed coding opportunities and does not also report instances of overbilling.

Medicare Advantage

What is it?

Medicare Advantage is an alternate option for Medicare recipients that is generally administered by private insurance companies. Also known as Medicare Part C, it replaces the fee for service model traditionally used by Medicare. Instead, a flat monthly fee per enrollee is paid by the U.S. Government to a third-party health plan. This fee is adjusted upward for sicker patients and adjusted downward for patients who are healthy.

Medicare Advantage plans have grown in popularity because of lower costs for patients and the additional health care benefits they provide to enrollees. They serve roughly a third of Medicare patients at a cost of approximately $150 billion a year to the U.S. Government.

Risk Scores

CMS has used a risk score to pay the health plans administering Medicare Advantage since 2004. Medicare Advantage plans bid for the amount they will charge Medicare each month for an enrollee. The diagnostic information provided by doctors is then used as a multiplier to adjust the patient’s risk score and pay the health plan more or less.

The potential for problems with the system is evident almost immediately. By claiming that the patients are much sicker than normal, the health plan can receive more from Medicare than it is entitled to receive. This practice is typically referred to as “upcoding” and is a violation of the False Claims Act when done by an entity with the requisite intent. It is also referred to as risk adjustment fraud or risk scoring fraud.  Whatever you want to call it, it is simply another example of health care fraud.

Medicare Advantage News

The False Claims Act

The False Claims Act imposes substantial penalties on doctors, hospitals and other health care companies engaged in fraud while rewarding whistleblowers for providing evidence of the misconduct to the Justice Department through a qui tam lawsuit.

Our Federal False Claims Act lawyers have guided whistleblower cases to several significant settlements on behalf of relators. Our largest unsealed cases are currently focused on kickbacks in violation of the Anti-Kickback Statute, but we have a broad base of experience across other types of Medicaid and Medicare fraud. In the pursuit of suspected frauds, we have brought cases to the attention of the government in many states, including New York, Florida, California and here in Philadelphia. In 2016, for example, we helped the federal and state governments recover $54 million from a Valeant subsidiary for kickbacks paid through speaker programs.

The law rewards whistleblowers for information with between 15 and 30 percent of the proceeds from the litigation, subject to numerous terms and conditions specified in the law. During President Obama's Administration, the U.S. paid out more than $4 billion to whistleblowers. For those not familiar with whistleblower cases, we have written a quick guide to the process.

Our False Claims Act attorneys undertake a thorough review of whistleblower evidence up front during the case evaluation process. We confirm that there is sufficient evidence of both inappropriate government billings as well as evidence of intentional or reckless conduct by the individuals in charge. We understand that no one person needs to have every piece of the puzzle and we have evaluated thousands of potential cases while honing our judgment. We also answer any questions that a whistleblower has in order to ensure that you can make an informed judgment about whether to proceed with a qui tam lawsuit.

To begin the process and get your questions answered, use our contact form or call 1-800-590-4116 for a free, confidential and no-obligation initial legal consultation from our whistleblower attorneys.