A Wall Street Journal investigation revealed that private insurers participating in the federal Medicare Advantage program received approximately $50 billion between 2018 and 2021 by adding “questionable diagnoses” to medical records. The investigation found that these insurers submitted diagnoses that triggered additional taxpayer-funded payments. In some cases, the diagnoses were entirely false, with patients either not receiving treatment for the conditions or the diagnoses conflicting with their doctor’s opinions, raising concerns about improper diagnoses and federal payments.
According to the Department of Justice (DOJ), the government and whistleblowers were involved in 543 settlements and judgments under the False Claims Act (FCA) last year, marking the highest number of such resolutions in a single year. The FCA empowers both the government and private plaintiffs to pursue enforcement actions against healthcare providers who submit false or fraudulent claims for payment to federally funded healthcare programs, including Medicare and Medicaid.
In 2023, the government recovered more than $2.68 billion from FCA settlements and judgments, with the DOJ reporting that over $2.3 billion came from qui tam lawsuits. Qui tam cases are FCA complaints brought by private plaintiffs or whistleblowers, known as qui tam relators. These relators are often disgruntled employees or third parties who have observed—and sometimes participated in—the fraudulent activity.
The DOJ has shown a strong commitment to prosecuting false claims related to the Medicare Advantage program. Recently, the DOJ secured settlements of $172 million with The Cigna Group and $22.5 million with Martin’s Point Health Care Inc. Additionally, the DOJ continues to intervene in qui tam lawsuits, including recent actions against:
- UnitedHealth Group: Alleged to have conducted chart reviews and knowingly disregarded information about Medicare beneficiaries’ medical conditions to increase risk adjustment payments. The defendant is represented by lead attorney David J. Schindler along with Roger S. Goldman, Daniel Meron, Jonathan Y. Ellis, and Matthew J. Glover of Latham & Watkins LLP.
- Independent Health Corporation: Alleged to have, along with DxID and Gaffney, submitted inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans. The defendant is represented by lead attorney Vincent E. Doyle III of Connors LLP along with Daniel Meron and David C. Tolley of Latham & Watkins LLP.
- Kaiser Permanente: Alleged that members of the Kaiser Permanente consortium violated the FCA by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees. The defendants are represented by lead attorneys David J. Leviss and K. Lee Blalack II of O’Melveny and Myers LLP.
Legal counsel for healthcare providers and organizations should familiarize themselves with the HHS OIG Self-Disclosure Protocol to report any discrepancies before potential whistleblowers can file an FCA complaint.
Health IT Experts at Quandary Peak Research
At Quandary Peak Research, our experts bring extensive experience in Health IT, including serving as the Software Quality Oversight Organization for a Corporate Integrity Agreement (CIA) involving Health IT software. Dr. Ajit Dhavle, our Vice President of Health IT Audits and Life Sciences, led a team of subject matter experts for the eClinicalWorks CIA under the combined oversight of HHS-OIG and the ONC.
While recognizing that every HHS-OIG investigation is unique, our team is exceptionally well-equipped to support attorneys and vendors facing complex challenges. We collaborate closely with a network of specialized subcontractors, including experts in medical coding and billing. Dr. Ajit Dhavle, a clinician with deep expertise in healthcare technology, has built a distinguished career focused on patient safety, physician workflows, laboratory interfaces, and compliance with state and federal regulations for medications and Health IT.
Beyond our work with CIAs, we assist clients and law firms nationwide with a broad range of issues, including False Claims Act investigations, medical coding and billing fraud, EHR audit logs for medical malpractice cases, and failed EHR installations. Clients also rely on us in a preventative capacity to conduct gap assessments, ensure compliance with regulatory requirements, and respond to inquiries or civil investigative demands from the Department of Justice.
