A California healthcare services provider last week agreed to pay the Federal government $30 million to settle claims that its affiliates submitted false information to Medicare in an effort at obtaining inflated repayments.
Federal investigators say the firm and its affiliates sent inaccurate information regarding Medicare Advantage Plans (a/k/a Medicare Part C) enrollees, who have the option of participating in Medicare Advantage Plans (MA Plans) that are owned and operated by Medicare Advantage Organizations (MAOs). Payouts on MA Plans are based upon demographic criteria describing risk factors for the individual subscribers, quantified into a risk score. More severe diagnoses result in higher risk scores which, in turn, yield higher payouts.
Per prosecutors, the defendant contracted with MAOs in exchange for a share of the payouts. In order to increase payouts, investigators say the defendant submitted diagnoses to partner MAOs that were more severe than the diagnoses actually were, thereby unjustly receiving inflated payouts on said diagnoses.
The settlement in question comes shortly after a separate but affiliated firm was indicted by federal prosecutors for violating the False Claims Act (a/k/a the “Lincoln Law”) for submitting unsupported diagnoses scores to federal medical insurance programs.
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