Kaiser Permanente to pay $556 million to settle Medicare Advantage fraud charges
Five affiliates of Kaiser Permanente have agreed to pay $556 million to the Justice Department to resolve allegations of improper increases in payments to Medicare Advantage plans under the False Claims Act.
Affiliates involved in the settlement, announced Jan. 14, include Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group and Colorado Permanente Medical Group. From 2009 to 2018, the affiliates were accused of submitting invalid or unsupported diagnosis codes to patients in their Medicare Advantage plans to obtain higher payments from the government.
The Justice Department said Kaiser violated CMS risk adjustment rules by pressuring doctors after patients' visits to add diagnoses to medical records that were unrelated to the initial encounters.
Medicare Advantage payments are risk-adjusted — meaning plans will reimburse sicker patients more — so inaccurate coding could lead to increased federal payments.
“Medicare Advantage is a vital program that must serve the needs of patients, not corporate profits,” Craig Missakian, U.S. Attorney for the Northern District of California, said in a statement. “Medicare fraud costs the public billions of dollars each year, so when health plans knowingly submit false information to obtain higher payments, everyone from beneficiaries to taxpayers loses.”
The complaint also alleges that Kaiser set goals and incentives related to coding performance and ignored internal warnings about these practices.
Caesars has not admitted wrongdoing but said it is settling the matter to avoid lengthy litigation.
“Several major health plans are facing similar government scrutiny of Medicare Advantage risk adjustment standards and practices, reflecting industry-wide challenges in applying these requirements. The Kaiser Permanente case is not about the quality of care our members receive. It involves a dispute over how to interpret the Medicare Risk Adjustment Program's documentation requirements,” the health system said in a statement to Medicare. Medical City News.
The settlement is one of the largest Medicare Advantage risk adjustment cases to date and highlights intense federal scrutiny of the program.
The Justice Department appears to be increasingly targeting health plans rather than coding practices, saying they improperly drive up costs to taxpayers — a sign that enforcement in this area is likely to continue.
Photo: imageBROKER/Harry Laub, Getty Images
