Justice Department joins False Claims lawsuits against Kaiser Permanente

False Claims Act, claims

False Claims Act, claims

The Department of Justice has joined six lawsuits alleging that Kaiser Permanente knowingly submitted false claims for Medicare Advantage beneficiaries to get higher reimbursements.

But Oakland, California-based Kaiser said it is confident that it has been compliant with Medicare Advantage program requirements.

The Centers for Medicare & Medicaid Services pay Medicare Advantage plans a per-person amount to provide benefits. The payments are adjusted based on demographic information and the diagnoses of each beneficiary. The adjustments, known as “risk scores,” are generally higher for those with more severe diagnoses.

To receive the risk-adjusted payments, Medicare Advantage plans must submit claims to CMS for each member and for each qualifying disease or condition. According to the complaints, members of the Kaiser Permanente consortium have been upcoding those claims, thereby violating the False Claims Act.

Since at least 2004, Kaiser entities have perpetrated a “systematic fraud on the Medicare Advantage program,” one of the unsealed lawsuits states.

The Kaiser entities allegedly pressured its physicians to create addenda to medical records to add risk-adjusting diagnoses which patients did not actually have and/or were not actually considered or addressed during a patient encounter. Kaiser did this often months or over a year after patient visits, the suit claims.

Further, the Kaiser entities have refused to correct — and to reimburse Medicare for — previously submitted risk adjustment claims when they discover that they were false, the lawsuits allege.

“Through this scheme, Kaiser has defrauded the United States of tens of millions of dollars,” according to the unsealed document.

In addition to Kaiser Permanente, the entities named in the complaints include:

  • Kaiser Foundation Health Plan Inc.
  • Kaiser Foundation Health Plan of Colorado
  • The Permanente Medical Group Inc.
  • Southern California Permanente Medical Group Inc.
  • Colorado Permanente Medical Group P.C.

Kaiser Permanente said it will vigorously defend against the allegations. The organization also lays some of the blame for the inaccuracies in coding on CMS.

“Our policies and practices represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance from CMS,” said Kaiser in a statement posted to its website.

“For nearly a decade, Kaiser Permanente has achieved consistently strong performance on risk adjustment data validation audits conducted by CMS,” the statement reads. “With such a strong track record with CMS, we are disappointed the Department of Justice would pursue this path.”

The plaintiffs are seeking damages equal to three times the loss the United States has sustained as a result of the defendants’ actions as well as a civil penalty of $11,000 for each violation of the False Claims Act.

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