The Department of Justice has filed a complaint against Kaiser Permanente alleging it engaged in a coordinated scheme to boost Medicare Advantage payments by altering medical records.
The move comes about three months after the government joined six whistleblower lawsuits claiming that the Oakland, California-based organization, which includes health plans, knowingly submitted false claims for Medicare Advantage beneficiaries.
But Kaiser is confident that it has been compliant with Medicare Advantage program requirements and intends “to strongly defend against the lawsuits alleging otherwise,” the organization said in a statement posted to its website.
The Centers for Medicare & Medicaid Services pay Medicare Advantage plans on a per-person basis. The payments are adjusted based on demographic information and diagnoses. These adjustments, known as “risk scores,” are generally higher for those with more severe diagnoses.
Between at least 2009 and 2018, Kaiser submitted thousands of claims to CMS for payment, changing patient medical records to either add diagnoses that did not exist or were unrelated to the medical visit, the DOJ alleges.
“Based on these unlawful false claims, Kaiser improperly obtained and retained hundreds of millions of dollars in risk-adjustment payments from CMS, in violation of both the [False Claims Act] and the common law,” the DOJ complaint states.
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The first of the whistleblower lawsuits was filed by Ronda Osinek, a data quality trainer and audit manager at a Kaiser medical group, in 2013, while the second was filed by a Kaiser physician Dr. James Taylor in 2014.
Both claimed that Kaiser submitted unsupported patient diagnosis codes to CMS.
Taylor further alleged that “Kaiser engaged in a variety of data-mining techniques as part of its fraudulent scheme, and either ignored the results of or simply failed to conduct various audits that would have confirmed that many of the diagnosis codes Kaiser was submitting to CMS were unsupported,” said Edward Baker, of counsel in law firm Constantine Cannon’s Washington, D.C., office and co-lead counsel on the firm’s case, in an email. “Dr. Taylor raised the alarm about these practices within Kaiser but was ignored.”
The law firm is representing Taylor.
Kaiser Permanente denied the allegations made in the lawsuits as well as in the government’s complaint.
“Our policies and practices represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance from CMS…we are disappointed the Department of Justice would pursue this path,” the statement on Kaiser’s website reads.
The government is seeking damages that amount to triple what Kaiser received from submitting false claims as well as the maximum civil penalties allowed by law.
Kaiser will likely seek to dismiss the DOJ complaint in the coming months, Constantine Cannon’s Baker said. If deemed necessary, a jury trial may be scheduled.
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