DOJ Investigates Alleged Medicare Advantage Risk Scoring Fraud Scheme

In 2003, Congress passed the “Medicare Modernization Act of 2003,” creating Medicare Part C and private Medicare Advantage health plans. According to a relatively recent Center for Public Integrity report, billions of Medicare Part C dollars have been lost each year through Medicare Advantage Risk Scoring Fraud.

False Claims Act qui tam relators have uncovered these fraud schemes, but the government has been slow to intervene in such actions, citing supposed FCA and evidentiary limitations. This trend might be reversing.

In February 2015, health insurer Humana disclosed in its annual Form 10-k report that the Department of Justice requested information on its Medicare Advantage risk adjustment practices “separate from but related to” an ongoing False Claims Act lawsuit. According to Humana, DOJ’s request “relates to our oversight and submission of risk adjustment data generated by providers in our Medicare Advantage network.”

Upcoding diagnoses results in inflated capitulated payments. With the right facts, upcoded diagnoses on Medicare Part C patients may make an attractive FCA case.