Kaiser Permanente Accused of Medicare Fraud
The United States has intervened in six complaints alleging that Kaiser Permanente affiliates violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees to receive higher reimbursements.
The Kaiser Permanente consortium members, including Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group Inc. and Colorado Permanente Medical Group P.C., allegedly pressured their physicians to create addenda to medical records after patient encounters to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements.
“The integrity of government health care programs must be protected,” said Acting U.S. Attorney Stephanie Hinds for the Northern District of California. “The Medicare Advantage Program maintains the health of millions, and wrongful acts that defraud the program cannot continue and will be pursued.”
“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division. “Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”
Under Medicare Advantage, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA Plans are paid a per-person amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the diagnoses of each plan beneficiary.
The federal government pays hundreds of billions of dollars every year to Medicare Advantage Plans. The District of Colorado will vigorously pursue investigations with our partners to make sure that money supports necessary healthcare, not fraud, said Acting U.S. Attorney Matt Kirsch for the District of Colorado.
The lawsuits were filed under the qui tam, or whistleblower, 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 cases are consolidated in the Northern District of California and captioned United States ex rel. Osinek v. Kaiser Permanente, 3:13-cv-03891 (N.D. Cal.); United States ex rel. Taylor v. Kaiser Permanente, et al., 3:21-cv-03894 (N.D. Cal.); United States ex rel. Arefi, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-01558 (N.D. Cal.); United States ex rel. Stein, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-05337 (N.D. Cal.); United States ex rel. Bryant v. Kaiser Permanente, et al., 3:18-cv-01347 (N.D. Cal.); and United States ex rel. [name] v. Kaiser Permanente, et al., 3:20-cv-01891 (N.D. Cal.).
The investigation is ongoing, and no further information is available at this time.
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Key Facts
- State: California
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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