DOJ Sues Firm For Fraudulent Medicare Billing

By: Jared Evan

A Healthcare insurance company which is currently being sued by the DOJ over fraudulent billing practices which allegedly over billed Medicare by billions of dollars, was selected by NYC to cover medical expenses of over 275,000 retired NYC workers. A rival insurance company is also suing saying NYC’s selection process was rigged from the start.

According to the lawsuit filed by the United States Attorney for the Southern District of New York:

This is a civil fraud action brought by the Government against defendant Anthem, Inc. (“Anthem”) to recover treble damages sustained by, and civil penalties and restitution owed to, the Government as result of Anthem’s violations of the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq. As set forth below, Anthem knowingly disregarded its duty to ensure the accuracy of the risk adjustment diagnosis data that it submitted to the Centers for Medicare and Medicaid Services (“CMS”) for hundreds of thousands of Medicare beneficiaries covered by the Medicare Part C plans operated by Anthem. By ignoring its duty to delete thousands of inaccurate diagnoses, Anthem unlawfully obtained and retained from CMS millions of dollars in payments under the risk adjustment payment system for Medicare Part C.

Because the diagnosis codes it submitted to CMS affected payment directly, it had an obligation to ensure that its data submissions were accurate and truthful, including by complying with the ICD coding guidelines adopted by CMS regulations. Indeed, Anthem expressly promised CMS that it would “research and correct” any “discrepancies” in its “risk adjustment data” submissions and that it would comply with CMS’s regulatory and contractual requirement that diagnosis codes for risk adjustment purposes must be substantiated by beneficiaries’ medical records. In addition, Anthem repeatedly attested to CMS that its risk adjustment diagnosis data submissions were “accurate, complete, and truthful” according to its “best knowledge, information and belief.” As Anthem knew, the promises and attestations it made to CMS placed on Anthem an obligation to make good faith efforts to delete inaccurate diagnosis codes.

Regardless of this serious lawsuit, NYC still went ahead with this deal, according to the NY Post.

The Manhattan US Attorney’s Office brought the civil-fraud suit against Anthem in March 2020, and the case is still pending, however former Mayor de Blasio went ahead with the deal anyway, and current Mayor Eric Adams Signed the deal recently.

“The NYC Medicare Advantage Plus Plan unveiled last year — the product of many months of negotiations between the city and the Municipal Labor Committee, representing more than 100 unions — will continue to offer premium-free health coverage to retirees, along with new and enhanced benefits,” Adams said.

“That is why after a careful and thorough review by my administration, I am announcing my support for this plan. I believe the new program will be in the best interest of retirees and the city’s taxpayers, who stand to save $600 million annually.”

Meanwhile the NY Post pointed out:

Rival bidder, insurance giant Aetna, has sued the city alleging the selection process was fixed to favor Alliance, a consortium that includes Emblem Health and Anthem/Blue Cross Blue Shield and has strong ties to union leaders, to operate the new Medicare Advantage Plus program.