Tennessee health firm settles false claims case for $2.4 million

Monogram Health Professional Services PC and Monogram Health Inc., collectively known as Monogram Health and headquartered in Tennessee, have agreed to pay $2.4 million to resolve allegations that they violated the False Claims Act by causing the submission of false diagnosis codes to increase payments under the Medicare Advantage program, the Justice Department announced.

The settlement covers conduct alleged to have occurred between Jan. 1, 2021, and Dec. 31, 2023. During that period, Monogram allegedly knowingly submitted diagnosis codes that were not clinically accurate, were not supported by documentation in beneficiaries’ medical records and/or did not require or affect patient care, treatment or management. The codes fell within four Hierarchical Conditions Categories: Protein-Calorie Malnutrition, Substance Use Disorder, Coagulation Defects and Other Specified Hematological Disorders, and Angina Pectoris, according to the Justice Department.

Under the Medicare Advantage program, the Centers for Medicare & Medicaid Services pays private health plans known as Medicare Advantage Organizations a fixed monthly amount for each enrolled beneficiary. Those payments are adjusted using a risk-based model that accounts for beneficiaries’ diagnosed health conditions. In general, MAOs receive higher payments for sicker beneficiaries expected to incur greater health care costs.

Monogram provides in-home care and related services to Medicare Advantage beneficiaries under contracts with certain MAOs. Under risk-sharing arrangements with those organizations, Monogram was eligible to receive more money from the MAOs when beneficiaries in its care had higher risk scores. Those arrangements allegedly gave Monogram a financial incentive to submit additional diagnosis codes to increase beneficiaries’ risk scores and the corresponding payments CMS made to the MAOs.

The Justice Department alleged that the disputed diagnosis codes inflated beneficiaries’ risk scores, causing CMS to make higher capitated payments to the MAOs than it otherwise would have made.

“When companies submit false diagnosis codes, they unlawfully exploit a system built to support vulnerable seniors,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. Shumate said the settlement reinforces the department’s commitment to protecting taxpayer money and ensuring Medicare Advantage payments are based on accurate information.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.