Kaiser Permanente will pay the federal government nearly $6.4 million to settle allegations that its Washington health plan claimed its Medicare Advantage members were sicker than they actually were to boost payments.
The U.S. Department of Justice announced the settlement with Kaiser Foundation Health Plan of Washington, formerly known as Group Health Cooperative, on Monday. It does not determine liability.
The government says the settlement resolves its allegations that the health plan knowingly submitted diagnoses for its Medicare Advantage members that were not supported by those patients' medical records to inflate the payments it received. The Medicare program pays private insurers who run Medicare Advantage plans a fixed, monthly amount per member that is adjusted based on each member's health status, with higher payments for sicker members.
Oakland, Calif.-based Kaiser said in a statement the settlement pertains to diagnoses Group Health submitted for payment years 2011 and 2012, well before Kaiser acquired the company in 2017. Kaiser said it has a history of commitment to compliance in this area.
Kaiser said while it denies the government's allegations, it has fully cooperated with the DOJ throughout the process. The health system said Group Health "submitted its data in good faith and in reliance on recommendations by its contracted risk adjustment vendor, which purported to be an expert in this area."
The whistleblower lawsuit that prompted the government's investigation was filed by Teresa Ross, a former Group Health employee. She will receive about $1.5 million for her role in the case. In her role at the company, Ross oversaw Group Health's internal audit and review processes for risk adjustment claims. In a news release, Constantine Cannon LLC, the firm that represented Ross in the case, said that Group Health hired an outside vendor to "improve" its risk adjustment scores, resulting in the submission of allegedly unsupported claims to Medicare that drew millions of dollars in additional Medicare Advantage payments.
"The DOJ needs whistleblowers like Ms. Ross to continue being the vigilant eyes and ears needed to expose fraud within the nation's most prominent insurers," Michael Ronickher, a partner at Constantine Cannon, said in a statement.
The government relies on Medicare Advantage insurers to submit accurate diagnoses to Medicare to ensure they're paid appropriately, Assistant Attorney General Jeffrey Bossert Clark with the DOJ's Civil Division said in a statement.
"We will continue to pursue those who undermine the integrity of the Medicare program and the data it relies upon," he said.