U.S. Justice Department Takes Tough Stance on MA Medicare Fraud in the Cases Against Kaiser Permanente

Whistleblower Healthcare Fraud Law Firm

DOJ recently joined forces with numerous private plaintiffs against healthcare giant Kaiser Permanente. The original whistleblower lawsuit, filed under the qui tam provisions of the False Claims Act, accuses the healthcare company of violating several key Medicare regulations. Five additional actions were subsequently brought against Kaiser, seeking to expose an alleged years-long MA Fraud scheme to defraud the federal government out of Medicare payments. 

Background on the Claims Against Kaiser

In the initial lawsuit filed in 2013, a California data specialist alleged that Kaiser utilized data mining to alter patient records retroactively. Subsequently, Federal prosecutors added charges of systematic pressure on doctors to amend patient records by including unfounded diagnoses. Kaiser purportedly directed its doctors to submit inaccurate diagnosis codes for its Medicare Advantage Plan enrollees. Per prosecutors, the not-for-profit healthcare conglomerate’s goal was to receive higher Medicare reimbursements based on these false claims.

Under the Medicare Advantage program (commonly referred to as Medicare Part C), individuals eligible for Medicare may enroll in MA plans, for which Medicare pays a per-person amount to provide covered benefits to these enrollees. CMS adjusts these MA payments based on the diagnoses of each beneficiary. The combination of these diagnoses and regional adjustments results in a specific ‘risk score’ for each Medicare beneficiary.

The trend in qui tam lawsuit allegations against MA plans has been the failure of MA plans to submit diagnosis codes to CMS only for conditions requiring or affecting patient care, management, or treatment during an in-person encounter, and specifically limited to outpatient medical encounters in the applicable service year.

This case is no different. The whistleblower lawsuits allege that to increase Medicare reimbursements, Kaiser pressured its physicians to add risk-adjusting diagnoses codes for conditions their patients did not actually have.

Through its representative, Kaiser Permanente has denied all allegations of wrongdoing. Per the statement posted on the company’s website, “We are confident that Kaiser Permanente is compliant with Medicare Advantage program requirements and we intend to strongly defend against the lawsuits alleging otherwise.”  



OIG and HSS have long emphasized Medicare’s managed care program’s reliance on the accuracy of information submitted by healthcare plans and providers. A primary goal of OIG-HSS’s 2021 strategic plan is to ensure the appropriate care and plan compensation for each eligible Medicare beneficiary. This trend in enforcement and enforcement goals against MS plans have substantially upticked.

If you have further questions on this or other MA Plan Fraud, please contact the Whistleblower Firm – Nolan Auerbach and White, LLP.

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