To calculate a beneficiary’s risk score, CMS looks to the medical records, which contain the risk-adjusting diagnoses submitted by MAOs. MAOs are required to “certify (based on best knowledge, information, and belief) that the data it submits” for risk adjustment are “accurate, complete, and truthful.” 214 Much of the government’s enforcement efforts in this space concern allegations that risk-adjusting diagnosis codes (i.e., those diagnosis codes that can impact the capitated payment amount), were either inaccurate or not properly supported in the underlying medical record. NOTEWORTHY MEDICARE ADVANTAGE AND RISK ADJUSTMENT SETTLEMENTS Sutter Health and affiliated entities agreed to pay $90 million to resolve FCA allegations that they submitted unsupported diagnosis codes for Medicare Advantage beneficiaries in order to receive inflated reimbursements. The government intervened in a qui tam action as to claims submitted for one foundation, and the resolution resolves both the intervened and non-intervened claims in the underlying qui tam . As a part of the settlement, the health system and entities entered into a five-year CIA with HHS-OIG. 215 PENDING LITIGATION RELATING TO MEDICARE ADVANTAGE AND RISK ADJUSTMENT In U.S. ex rel. Osinek v. Kaiser Permanente , the United States intervened in six qui tam complaints alleging that members of the Kaiser Permanente (Kaiser) consortium violated the FCA by submitting inaccurate diagnosis codes for its Medicare Advantage beneficiaries in order to receive higher reimbursements. 216 The government filed its complaint in intervention, consolidating the six individual qui tam lawsuits. 217 The government’s complaint focuses on Kaiser’s alleged improper use of addenda in medical records and asserts that between 2009 and 2018 Kaiser added approximately 500,000 diagnoses via addenda that were unsupported in the medical record and has alleged damages “in the range of $1 billion.” More specifically, the government contends that Kaiser improperly utilized medical record addenda by: (1) setting progressively higher risk score targets which were increasingly difficult to meet; (2) conducting “data mining” and one-way chart reviews of patient records; (3) using queries to add new diagnoses via addenda that had nothing to do with the original patient visit and requiring physicians to justify refusals to add diagnoses; and (4) using financial incentives to pressure Permanente physicians to create improper addenda, including through coding parties, which were known as the “dash for cash,” by adding diagnoses that were not supported in the underlying medical record. The government 214 42 C.F.R. § 422.504. 215 See https://www.justice.gov/opa/pr/sutter-health-and-affiliates-pay-90-million-settle-false-claims-act- allegations-mischarging. 216 The six individual complaints are: (1) U.S. ex rel. Osinek v. Kaiser Permanente, No. 13-cv-3891, Dkt. No. 1 (N.D. Cal. Aug. 22, 2013); (2) U.S. ex rel. Taylor v. Kaiser Permanente , No. 21-cv-3894, Dkt. No. 4 (D. Colo. Nov. 2, 2014); (3) U.S. ex rel. Stein and Bone v. Kaiser Foundation Health Plan Inc. , No. 16-cv-3331, Dkt. No. 1 (C.D. Cal. May 15, 2016); (4) U.S. ex rel. Bryant and Hernandez v. Kaiser Permanente , No. 18-cv-1347, Dkt. No. 1 (N.D. Cal. Mar. 1, 2018); (5) U.S. ex rel. Bicocca v. Kaiser Permanente Medical Group, Inc. , No. 21-cv-3124, Dkt. No. 1 (E.D. Cal. Feb. 10, 2020); and (6) U.S. ex rel. Arefi v. Kaiser Foundation Health Plan Inc. , No. 16-cv- 1558, Dkt. No. 1 (N.D. Cal. Sept. 4, 2015). 217 No. 3:13-cv-03891, Dkt. No. 110 (N.D. Cal. Oct. 25, 2021).
MANAGED CARE/ MEDICARE ADVANTAGE Medicare Advantage enrollment has more than doubled in the last decade. In 2020, 24 million (or 36% of Medicare-eligible individuals) elected to enroll in a Medicare Advantage plan. Payments made by CMS to Medicare Advantage plans amount to over $200 billion annually. By 2023, it is anticipated that payments made to Medicare Advantage Organizations (MAOs) will reach $250 billion. Medicare Advantage plans are operated by privately-owned MAOs, which administer the Medicare benefit under Medicare Part C. Unlike Medicare’s fee-for-service reimbursement model, Medicare Advantage plans are compensated on a monthly basis with a fixed capitation payment for each member. The amount of the capitated payment is based on a “risk score” that is assigned to each beneficiary and is based on medical history, demographics and other considerations. A beneficiary’s risk score and corresponding capitation payment amount are intended to reflect the anticipated cost to manage a beneficiary’s care relative to other beneficiaries.
HEALTHCARE FRAUD & ABUSE REVIEW 2021 BASS, BERRY & SIMS | 38
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