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Buffalo Health Insurer to Pay $98M in Medicare Advantage Scam
Independent Health Association and its affiliate, Independent Health Corporation, have agreed to pay up to $98 million to resolve allegations that they knowingly submitted or caused the submission of invalid diagnosis codes to Medicare for Medicare Advantage Plan enrollees to increase payments that Independent Health received from Medicare.
According to the United States, Independent Health created a wholly owned subsidiary, DxID LLC, to retrospectively search medical records and query physicians for information that would support additional diagnoses that could be used to generate higher risk scores. The United States filed a complaint alleging that, from 2011 through at least 2017, Independent Health, with the assistance of DxID and its founder and chief executive, Betsy Gaffney, knowingly submitted diagnoses to CMS that were not supported by the beneficiaries’ medical records in order to inflate Medicare’s payments to Independent Health.
“The government expects those who participate in Medicare Advantage to provide accurate information to ensure that proper payments are made for the care received by enrolled beneficiaries,” said Deputy Assistant Attorney General Michael Granston of the Justice Department’s Civil Division. “Today’s result sends a clear message to the Medicare Advantage community that the United States will take appropriate action against those who knowingly submit inflated claims for reimbursement.”
Independent Health will make guaranteed payments of $34,500,000 and contingent payments of up to $63,500,000 on behalf it itself and DxID, which ceased operations in 2021. The settlement is based on Independent Health’s ability to pay. Gaffney will separately pay $2,000,000.
As part of the settlement, Independent Health entered into a five-year corporate integrity agreement with HHS-OIG. The CIA requires, among other things, that Independent Health hire an Independent Review Organization to annually review a sample of Independent Health’s Medicare Advantage patients’ medical records and associated internal controls to help ensure accurate information is provided to CMS.
“To protect the integrity of Medicare and other federal health care programs, my office is committed to ensuring that each and every dollar meant for Medicare beneficiaries is spent appropriately and in accordance with the law,” said U.S. Attorney Trini E. Ross for the Western District of New York. “As this settlement makes clear, we will diligently pursue those who defraud government programs.”
“Medicare Advantage Plans that attempt to game federal programs for profit must be held accountable through rigorous oversight and enforcement,” said Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to root out fraud, waste and abuse in federal health care programs.”
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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