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Table of Contents

Buffalo-Based Insurer Accused of Medicare Scam

New York – Grimy Times has learned that Independent Health Association, Independent Health Corporation, DxID LLC, and Betsy Gaffney, former CEO of DxID, are facing a lawsuit for allegedly submitting fake diagnoses to Medicare to boost reimbursement. The scheme, uncovered in Buffalo, NY, has left taxpayers footing the bill and Medicare beneficiaries without quality care.

According to the lawsuit, Independent Health, DxID, and Gaffney used unsupported diagnosis codes to inflate risk adjustment payments from Medicare. The scheme, which involved coding conditions not documented in patient records, enabled Independent Health to receive payments greater than it was entitled to.

“The Medicare Advantage Program relies on accurate information about the health status of enrollees to ensure that they receive appropriate treatment and that participating health plans receive proper compensation for the services they actually provide,” said Deputy Assistant Attorney General Michael D. Granston. “The department will continue to hold accountable health plans or providers that report unsupported diagnoses to inflate risk adjustment payments.”

The United States alleges that DxID coded conditions not documented in patient records, and even asked healthcare providers to sign addenda forms up to a year after a visit or encounter. This was done to substantiate risk-adjusting diagnoses that were not documented during the patient encounter, in violation of Medicare requirements.

Independent Health’s wholly-owned subsidiary, DxID, provided retrospective chart review and addenda services to Independent Health and other Medicare Advantage Plans. DxID operated on a contingency fee of up to 20% of the additional recovery that the MA Plans received based on diagnoses captured by DxID. The lawsuit alleges that these unsupported diagnoses inflated the risk scores of beneficiaries, resulting in inflated payments to Independent Health and other MA Plans.

The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The United States has intervened in the lawsuit, bringing the case against Independent Health Association, Independent Health Corporation, DxID LLC, and Betsy Gaffney, former CEO of DxID.

U.S. Attorney James P. Kennedy Jr. for the Western District of New York stated, “Defrauding taxpayer-funded healthcare programs such as Medicare hurts not only taxpayers but our nation’s entire healthcare system.” The case is a stark reminder of the importance of accurate and truthful information in the healthcare industry.