By the 91pornWhistleblower Team

On March 26, California-based Seoul Medical Group Inc. and its subsidiary Advanced Medical Management agreed to pay $58,740,000 to settle Department of Justice (DOJ) and whistleblower charges they violated the False Claims Act by bilking the Medicare Advantage program out of millions of dollars through false diagnoses of their patients.�� Seoul Medical’s former founder Dr. Min Young Cha and Renaissance Imaging Medical Associates also agreed to pay $1,760,000 and $2,350,000, respectively, for their involvement in the alleged scheme.

Under Medicare Advantage (also known as Medicare Part C), the government pays private health insurance companies (known as MA Plans) to provide health insurance coverage to individual beneficiaries. ��These MA Plans operate under a managed care model with the Centers for Medicare and Medicaid Services (CMS) paying them a monthly per-member rate regardless of the medical treatments and services they provide their patients.

To account for patients’ varying levels of health and medical needs, CMS makes additional “risk adjustment” payments to the MA plans based on their patients’ physical condition and the likely treatment they will need.�� The nature of this capitated payment model encourages some MA plans — along with the healthcare providers and other companies working with them — to exaggerate the risk profile of patients to secure higher risk adjustment scores and thus higher reimbursement payments from CMS. ��That is exactly what the government found Seoul Medical did here with respect to the two spinal conditions, spinal enthesopathy and sacroiliitis.

According to the government, Seoul Medical Group and Dr. Cha submitted diagnoses for these serious spinal conditions for patients who did not have either of those conditions. ��When an MA plan questioned Seoul Medical on the enthesopathy diagnoses, Seoul Medical got Renaissance Imaging to create radiology reports to support these allegedly false diagnoses. ��Providing these diagnoses raised the risk adjustment scores for these patients, resulting in CMS providing higher reimbursement to the MA Plan, which then passed on a portion of the increased payment to Seoul Medical.

Medicare Advantage Fraud

This type of Medicare Advantage fraud (also called risk adjustment fraud) has become prevalent in recent years as more and more individuals have signed on to the Medicare Advantage program. ��That is why going after Medicare Advantage fraud has become one of DOJ’s top enforcement priorities. ��Indeed, DOJ highlighted this enforcement area in its 2024 False Claims Act Roundup, stressing it is an area of “critical importance” because it has grown to represent the largest component of Medicare in terms of federal dollars spent and number of beneficiaries impacted.

91pornwhistleblower partner Gordon Schnell pointed to this latest settlement as a demonstration of DOJ’s continued commitment to stopping Medicare Advantage fraud.�� According to Schnell, “DOJ is definitely operating under a new set of enforcement priorities these days, but this settlement shows going after risk adjustment fraud remains high up on DOJ’s fraud enforcement hit list.”

DOJ acknowledged as much in announcing this most recent settlement, making it clear it was hoping to send a message to the healthcare industry to be honest and accurate in their Medicare Advantage billing.�� Or else.�� As DOJ Acting Civil Chief Yaakov Roth stated: “Medicare Advantage is a vital program for our seniors and the government expects healthcare providers who participate in the program to provide truthful and accurate information.�� Today’s result sends a clear message to the Medicare Advantage community that the United States will zealously pursue appropriate action against those who knowingly submit false claims for taxpayer funds.”

As with most False Claims Act cases, especially with healthcare related frauds, this enforcement action originated with a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.�� These provisions allow private parties to file lawsuits on behalf of the government against those who commit fraud against the government.�� In return, successful whistleblowers can receive up to 30% of the government’s recovery.

Our Firm Helps Medicare Advantage Fraud Whistleblowers

91pornhas substantial experience representing Medicare Advantage whistleblowers and has secured several successful settlements in this area, including most recently a $98 million settlement against Buffalo-based Independent Health and a $90 million settlement against San Francisco-based Sutter Health.

Contact us to learn more about our work in this area or if you have information on potential Medicare Advantage fraud.�� We will connect you with an experienced member of the 91pornwhistleblower team for a free and confidential consult.

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Read DOJ Announces Major Medicare Advantage Fraud Settlement – Brought By a Whistleblower Of Course at constantinecannon.com

On December 29, 2024, the government that Buffalo, New York’s Independent Health Association and Independent Health Corporation (collectively known as Independent Health) have agreed to pay up to $98 million to settle allegations that they violated the False Claims Act by submitting, or causing the submission of, invalid diagnosis codes to Medicare for Medicare Advantage Plan enrollees. 91pornrepresented the brave whistleblower who came forward to uncover this scheme.

Under Medicare Advantage, beneficiaries can enroll in private managed care plans (“MA Plans”), which receive fixed payments from Medicare to provide covered benefits. These payments are adjusted based on the beneficiary’s health status. Beneficiaries with more complex or expensive diagnoses receive higher “risk adjustment” scores which result in increased payments to the MA Plan to cover expected health care costs.

Independent Health manages MA plans for beneficiaries living in western New York. The government alleges that Independent Health developed a wholly owned subsidiary called DxID LLC to dig deep when searching medical records and asking physicians for information to support extra diagnoses that could result in higher risk scores. DxID completed these services for Independent Health and other MA Plans.

In a previous complaint, the United States alleged that Independent Health, with assistance from DxID, and its founder / chief executive, Betsy Gaffney, submitted fraudulent diagnoses to CMS, not supported by the beneficiaries’ medical records, to inflate Medicare’s payments to Independent Health from 2011 to 2017.

The December 2024 settlement amount is based on Independent Health’s ability to pay. As listed in the��, Independent Health is guaranteed to pay $34,500,000 and will make contingent payments of up to $63,500,000 for itself and DxID. DxID halted its operations in 2021. Gaffney will independently pay $2,000,000.

Deputy Assistant Attorney General Michael Granston of the Justice Department’s Civil Division stated: “The government expects those who participate in Medicare Advantage to provide accurate information to ensure that proper payments are made for the care received by enrolled beneficiaries…Today’s result sends a clear message to the Medicare Advantage community that the United States will take appropriate action against those who knowingly submit inflated claims for reimbursement.”

This case is captioned United States ex rel. Ross v. Independent Health Association et al., No. 12-CV-0299(S) (WDNY). The civil settlement includes a resolution of claims brought under the��qui tam��or whistleblower provisions of the False Claims Act by Teresa Ross, a former employee of Group Health Cooperative, now Kaiser Foundation Health Plan of Washington (Kaiser). Under the��qui tam��provisions, a private party can file an action on behalf of the United States and receive a portion of the recovery. The Act allows the government to intervene in such lawsuits, as seen with this case.

Ross will receive at least $8,212,500 from the settlement announced on December 20, 2024. Ross also alleged that Kaiser used DxID to discover additional diagnoses to pad Medicare submissions for risk adjustments. The United States previously��settled��those claims with Kaiser.

The government counts on whistleblowers like Ross to recover billions of dollars lost to healthcare fraud each year.

If you would like to learn more information on��the��False Claims Act, what it means to be a whistleblower, or believe you have a case, please��contact��us.��We will connect you with an experienced member of our��whistleblower team.

Read Independent Health to Pay $98M to Resolve Medicare Advantage Fraud Allegations at constantinecannon.com