A news release from central California U.S. Attorney Andre Birotte Jr. said (PDF) that the government would use “every tool at our disposal” to fight overspending in government healthcare programs: “This massive settlement demonstrates the commitment of the United States Justice Department to eradicate fraud, waste and abuse in this nation's public health care programs.”
However, an e-mailed statement from the insurer said that errors in the state's payment rates for dual-eligible long-term care patients was discovered following an internal company investigation that did not suggest misconduct on the part of any current or former employees.
“We played no role in how the state set rates for the population at issue, and we were previously unaware of the mistake the state made,” health plan President and CEO Chris Wing said in a written statement. “Once we learned that the state made errors, we decided to refund all the money mistakenly paid. This is the right thing to do and is in the best interests of the thousands of senior citizens we serve.”
The Justice Department statement said the overpayments stemmed from two “actuarial errors made during the state of California's rate-setting process.”
The longest-running type of overpayments, which lasted from 1985 to 2008, allowed the health plan to receive nursing-home rates for long-term-care patients who generally received their care at home. Between 2001 and 2007, another error allowed the plan to continue paying for long-term care patients after they had exceeded their maximum two months in a nursing home, the Justice Department release said.
In a separate legal settlement that was announced in the same news release, the Justice Department noted that on Aug. 10 the company paid $3.8 million to settle allegations from a federal False Claims Act whistle-blower who accused the company of inflating patients' risk-adjustment scores, leading to higher per-patient rates.
The lawsuit alleged that the health plan hired an outside company to review medical charts to find diagnosis codes that could be changed to increase Medicare Advantage reimbursements, but then failed to notify CMS that some of the original diagnosis codes would need to be deleted, which had the effect of increasing risk-adjustment scores.
The Justice Department statement said the company did not admit wrong-doing and fully cooperated in the investigation of allegations brought by former health plan employee James Swoben.