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Medicare Fraud Lawsuit: Independent Health to Pay Up To $98M to Settle False Claims Act Suit

Medicare Fraud Lawsuit: Independent Health to Pay Up To $98M to Settle False Claims Act Suit

A
Anmol Tiwari
January 14, 2025
Medicare Fraud Lawsuit: Independent Health to Pay Up To $98M to Settle False Claims Act Suit

United States Of America vs. Independent Health Association et al

Case Background

On April 11, 2012, the Plaintiff, the United States of America, filed a lawsuit in the United States District Court for the Western District of New York (Case number: 1:12cv299). The Honorable William M. Skretny presided over the case. This legal action was brought under the False Claims Act in response to allegations of Medicare fraud. The lawsuit accused the defendants of deliberately submitting false and inflated Medicare risk adjustment claims to the Centers for Medicare & Medicaid Services (CMS), thereby defrauding the government. The case sought to hold the defendants accountable for violating the False Claims Act and demanded penalties and damages for the fraudulent claims submitted under the Medicare Advantage program.

Cause

The defendants deliberately orchestrated a complex scheme to defraud the Centers for Medicare & Medicaid Services (CMS) by submitting thousands of false and inflated risk adjustment claims. Group Health Cooperative (GHC), a Washington-based healthcare provider, and Independent Health Corporation (IHC), a New York-based company, partnered with DxID LLC, a subsidiary of IHC specializing in risk adjustment reviews, to manipulate Medicare Advantage reimbursements. Between 2010 and 2012, the defendants knowingly submitted fraudulent risk adjustment claims to CMS to inflate reimbursements for their Medicare Advantage plans. DxID reviewed patient medical records and fraudulently identified additional diagnoses, even though these were unsupported by adequate medical documentation. The defendants submitted these exaggerated diagnoses, falsely claiming patients had severe medical conditions like chronic kidney disease, diabetic neuropathy, and major depressive disorder, even when treating physicians had explicitly ruled out these conditions in their medical notes. Bypassing GHC's internal Insurance and Health Data Analysis (IHDA) department, which adhered to CMS's strict coding standards, GHC executives authorized DxID to submit fraudulent claims directly through the Finance and Decision Support department. This bypassed proper oversight. DxID also failed to delete previously submitted erroneous claims, compounding the fraud. By exploiting CMS’s risk adjustment payment model, the defendants systematically defrauded the U.S. Government of millions of dollars.

Injuries

The fraudulent activities committed by the defendants caused significant financial harm to the U.S. Government and taxpayers. CMS paid millions of dollars in inflated reimbursemen

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Tags

False Claims Act
CMS fraud
Medicare Advantage fraud
Medicare fraud
risk adjustment claims
false claims act
cms fraud
medicare advantage fraud
medicare fraud