In a significant legal resolution, Kaiser Permanente affiliates will pay $556 million to settle allegations of false claims violations. The case centers on claims that Kaiser unlawfully increased payments from Medicare by submitting inaccurate diagnosis codes for its Medicare Advantage Plan participants.
Kaiser Permanente’s Settlement Overview
The involved entities include Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group, and Colorado Permanente Medical Group P.C. Together, they have been accused of manipulating diagnosis records to receive inflated reimbursements from the government.
Background of the Allegations
The allegations originate from a lawsuit filed in October 2021 in the Northern District of California. The U.S. government contended that from 2009 to 2018, Kaiser systematically pressured its physicians to modify medical records after patient consultations. This practice reportedly involved adding diagnoses that were not discussed during those visits, thus violating federal regulations.
The Centers for Medicare & Medicaid Services (CMS) utilizes adjusted payments for Medicare Advantage Organizations based on the health status of beneficiaries. These adjustments rely on accurate diagnosis codes, which must align with actual medical records and care provided during face-to-face appointments.
Key Findings from the Investigation
- Kaiser allegedly developed mechanisms to identify potential diagnoses not previously recorded.
- Queries were sent to physicians to encourage them to add diagnoses months after patient visits.
- Many additions contradicted CMS requirements regarding record accuracy.
Financial Implications and Whistleblower Cases
This settlement also addresses claims brought forth by whistleblowers Ronda Osinek and Dr. James M. Taylor, former Kaiser’s employees. They filed lawsuits under the qui tam provisions of the False Claims Act, allowing private individuals to sue on behalf of the government. Their shared recovery from this settlement will be $95 million.
Government Statements on Medicare Fraud
Investigators highlighted the importance of integrity within the Medicare system, emphasizing the need for accuracy in information submitted by healthcare providers. Assistant Attorney General Brett A. Shumate expressed that “the government expects truthful and accurate information” from Medicare Advantage participants.
U.S. Attorney Craig H. Missakian further cautioned that fraud within Medicare costs taxpayers significantly, underscoring the government’s commitment to holding entities accountable for misleading practices.
Conclusion
The resolution of Kaiser Permanente’s case showcases the government’s focused efforts to combat healthcare fraud through the False Claims Act. The collaborative investigation involved multiple federal agencies, reinforcing the commitment to protecting taxpayer interests and maintaining the integrity of Medicare programs.
