AIDS Healthcare Foundation to pay $1.44M to settle Medicare Advantage billing claims

AIDS Healthcare Foundation, a Los Angeles-based nonprofit, has agreed to pay $1.44 million to resolve allegations that it violated the False Claims Act by submitting or failing to delete false or invalid diagnosis codes to increase its Medicare Advantage payments, the Justice Department announced.

The claims are allegations only, and there has been no determination of liability, the department said.

Under Medicare Advantage, also known as Medicare Part C, beneficiaries can leave traditional Medicare and enroll in private health plans. The Centers for Medicare & Medicaid Services pays those plans a fixed monthly amount per enrollee, adjusted for health risk. The agency generally pays more for sicker beneficiaries expected to incur higher health care costs. Diagnosis codes submitted for payment must be accurate and supported by medical records, the department said.

AHF’s Managed Care Division, doing business as Positive Healthcare Partners, operated special needs Medicare Advantage plans for beneficiaries with HIV who lived in Florida, Georgia or California, according to the Justice Department.

The settlement resolves allegations that, for payment years 2017 through 2023, AHF failed to timely investigate and delete diagnosis codes that were inaccurate or not documented in medical records. The department said AHF’s risk adjustment coders began chart reviews around 2017 and kept “Delete Research” spreadsheets listing potentially unsupported codes that needed further research.

Although AHF knew it had to investigate and delete inaccurate and unsupported codes within 60 days, the government alleged, it did not delete most of the affected codes in those spreadsheets until 2024 or 2025, after being notified of the investigation.

The government also alleged that, for payment year 2017, AHF knowingly submitted HIV diagnosis codes that were not documented in any medical record for a face-to-face visit, contrary to CMS requirements.

“The Justice Department will continue to protect the public fisc and hold accountable those who receive inflated payments by knowingly providing or failing to correct false information,” said Assistant Attorney General Brett A. Shumate of the department’s Civil Division.

First Assistant U.S. Attorney Bill Essayli of the Central District of California said, “We will not tolerate companies undermining the interests of Medicare patients for financial gain.”

Acting Deputy Inspector General for Investigations Miranda L. Bennett of the Health and Human Services Office of Inspector General said, “HHS-OIG will continue to safeguard taxpayer funds by holding organizations accountable when their failures inflate federal payments and compromise program trust.”

The settlement resolves a whistleblower suit filed by Donna Irons, a former AHF risk adjustment coder, under the False Claims Act’s qui tam provisions. The case is United States ex rel. Irons v. AIDS Healthcare Foundation d/b/a Positive Healthcare Partners, No. 23-cv-2160, in U.S. District Court for the Central District of California. Irons will receive $259,200 of the federal recovery.

The department said AHF received credit under Justice Manual § 4-4.112 for cooperating with the investigation, enhancing its compliance program and proactively submitting deletions for unsupported diagnosis codes during the investigation.

The department also linked its False Claims Act enforcement work to the administration’s Task Force to Eliminate Fraud and National Fraud Enforcement Division. Trial Attorney Tiffany L. Ho and Assistant U.S. Attorney S. Desmond Jui handled the case.

Tips about potential fraud can be reported to HHS at 800-HHS-TIPS (800-447-8477).