The owners of a defunct Medicare Advantage plan in Florida agreed to pay the U.S. $22.6 million to settle allegations that the plan falsely increased the severity of diagnoses to defraud the program.
America's Health Choice Medical Plans, Vero Beach, Fla., was owned by Walter and Lalita Janke. The CMS canceled the company's Medicare Advantage contract in 2007 after two years of appeals and litigation. Medicare paid the company $26 million in unsubstantiated risk adjustment payments in 2005 and 2006, according to a lawsuit the government filed in February 2009, and most of that money flowed to Medical Resources, a company likewise owned by the Jankes that provided most of the primary-care services for the plan's enrollees at several clinics.
The agreement stipulates that the Jankes do not admit liability or wrongdoing by settling the suit.
During the course of litigation, the court froze about $20 million of the Jankes' assets, which along with money from the dissolution of the companies—held in receivership by the Florida Department of Financial Services—will cover the settlement payment.