Florida health firm to pay $14.1 million over Medicare Advantage fraud claims

A Jacksonville, Florida-based management services organization has agreed to pay $14.1 million to resolve allegations that it violated the False Claims Act by causing false diagnosis codes to be submitted to increase Medicare Advantage payments, the Justice Department announced.

Complete Health Partners Holdings, which manages, owns or otherwise operates affiliated provider groups in Florida, Alabama and Colorado, was accused of causing the submission of diagnosis codes that were not clinically valid, properly supported by beneficiaries’ medical records or considered in their care, management or treatment, the government said. The allegations center on diagnosis codes within HCC 55, covering drug and alcohol dependence, and HCC 59, covering major depressive, bipolar and paranoid disorders.

Under the Medicare Advantage program, also called Medicare Part C, the Centers for Medicare & Medicaid Services pays private insurers — known as Medicare Advantage Organizations — a fixed monthly amount for each enrolled beneficiary, with payments adjusted based on risk factors tied to reported diagnoses. In general, sicker beneficiaries with higher expected health care costs generate higher payments to the insurer. Complete Health had “risk sharing” arrangements under which Medicare Advantage Organizations paid it a percentage of the payments they received from CMS, giving the company a financial incentive to submit additional diagnosis codes that would increase patients’ risk scores and the corresponding CMS payments, according to the Justice Department.

The government contends that from 2020 to 2023, Complete Health provided its coders and physicians with incorrect coding guidance regarding diagnosis codes within HCC 55 and HCC 59. Its coders allegedly reviewed beneficiaries’ medical records, identified additional diagnosis codes for chronic conditions and prompted doctors to add those codes even when they were unsubstantiated or not clinically justified. The doctors then added inaccurate diagnosis codes, resulting in increased CMS payments to the Medicare Advantage plans, which passed a portion of the additional payments to Complete Health, the department said.

“As the Medicare Advantage program continues to grow, providers who participate in the program must be held to account when they attempt to improperly profit at the taxpayer’s expense,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division.

U.S. Attorney Gregory W. Kehoe for the Middle District of Florida said the settlement “sends a strong message” that health care fraud enforcement remains a priority in his district. HHS Office of Inspector General Special Agent in Charge Isaac M. Bledsoe said the resolution demonstrates his office’s commitment to safeguarding the integrity of federal health care programs, including Medicare Advantage.

The case stemmed from a whistleblower lawsuit filed by Karen Bowers, a former associate director of risk adjustment at VIVA Health, under the qui tam provisions of the False Claims Act. Bowers will receive approximately $2.47 million as her share of the federal recovery, according to the Justice Department.

The settlement resulted from a coordinated effort by the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from HHS-OIG. The claims resolved by the settlement are allegations only, and there has been no determination of liability.