Kaiser agrees to pay $6.4 million to settle claims it received inflated Medicare Advantage payments

The Kaiser Foundation Health Plan of Washington, formerly known as Group Health Cooperative, has agreed to pay $6.37 million to resolve allegations that it inflated diagnoses to Medicare for higher payments, the Justice Department announced this week. 

Kaiser Foundation Health Plan, which is part of Kaiser Permanente, is headquartered in Oakland, California.   

The settlement resolves allegations that Group Health Cooperative knowingly submitted diagnoses that were not supported by the beneficiaries' medical records to inflate the payments that it received from Medicare. The claims resolved by the settlement are allegations only; there has been no determination of liability.

The allegations were originally brought in a lawsuit filed by whistleblower Teresa Ross, a former employee of Group Health Cooperative. Ross will receive approximately $1.5 million as her share of the recovery, the DOJ said. 

WHY THIS MATTERS

Insurers are doing very well in the Medicare Advantage market, and it didn't hurt that the Centers for Medicare and Medicaid Services promoted the benefits of the plans just before Medicare open enrollment.

Medicare pays the private insurance plans a capitated per-member, per-month payment. CMS risk-adjusts the payment based on the health of the members, paying more for sicker members. The plans report beneficiary diagnoses and other information to Medicare on an annual basis.

THE LARGER TREND

An estimated 42% of Medicare beneficiaries are expected to be enrolled in a private Medicare Advantage plan for 2021, an increase from the third CMS had previously reported. 

As baby boomers age into retirement, MA numbers are only expected to grow.

ON THE RECORD

"The United States relies on Medicare Advantage Organizations to submit accurate diagnosis data to Medicare to ensure that the compensation they receive is appropriate," said Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice's Civil Division. "We will continue to pursue those who undermine the integrity of the Medicare program and the data it relies upon."

"When insurance providers take advantage of Medicare and falsely claim that they are entitled to repayment for unsupported diagnoses, American taxpayers suffer in the form of higher costs," stated U.S. Attorney James P. Kennedy, Jr. "We will continue to work to ensure that these programs are not defrauded and that monies are not paid for unwarranted claims." 

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com