Kaiser Permanente affiliates have reached a $556 million settlement following allegations of false Medicare claims, as reported by the U.S. Attorney's Office for the District of Colorado. Involved in the settlement are 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 P.C. These allegations assert that the healthcare consortium submitted incorrect diagnosis codes to gain higher payments from Medicare Advantage Plan enrollees.
According to the filed complaint in the Northern District of California, the scheme, which focused on California and Colorado, involved Kaiser pressuring physicians to add irrelevant diagnoses to patient records after visits. These added diagnoses, which were not considered during the actual medical consultations, were reportedly used to inflate payments from the Centers for Medicare & Medicaid Services (CMS). Kaiser allegedly did this by developing a strategy to scan past patient records for possible diagnoses that had not been claimed for risk adjustment purposes. "Today's resolution sends the clear message that the United States holds healthcare providers and plans accountable when they knowingly submit or cause to be submitted false information to CMS to obtain inflated Medicare payments," Assistant Attorney General Brett A. Shumate said, as documented by the U.S. Department of Justice.
This large-scale settlement also settles claims included in whistleblower lawsuits filed under the False Claims Act by two former Kaiser employees, Ronda Osinek and Dr. James M. Taylor. As part of their qui tam action, they will receive a share of the settlement totaling $95 million. The False Claims Act facilitates these kinds of actions, allowing individuals to sue on behalf of the government and potentially receive a portion of recovered funds.
Officials have prominently stated their commitment to ensuring the integrity of Medicare-funded programs. "Medicare Advantage is a vital program that must serve patients’ needs, not corporate profits," U.S. Attorney Craig H. Missakian for the Northern District of California told the U.S. Department of Justice. "Fraud on Medicare costs the public billions annually, so when a health plan knowingly submits false information to obtain higher payments, everyone — from beneficiaries to taxpayers — loses. We have an obligation to protect the American taxpayer from waste, fraud, and abuse and we will relentlessly pursue individuals and organizations that compromise the integrity of the Medicare program." The settlement has not determined any liability but resolves the allegations.
