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DOJ Joins Whistleblower Lawsuit Accusing Health System of Submitting Unsupported Diagnosis Codes

Posted by David Fong on Jan 31, 2019 8:00:00 AM

As the share of Medicare beneficiaries enrolled in Medicare Advantage has steadily grown to over 19 million beneficiaries according to a U.S. Attorney, federal prosecutors intervening in a newly unsealed whistleblower lawsuit in California is yet another example of the government's willingness to protect the integrity of the Medicare Advantage program through the courts.


 WhistleAs reported in Fierce Healthcare, the U.S. Attorney's Office has joined a lawsuit against Sutter Health and the Palo Alto Medical Foundation accusing the health care providers of knowingly submitting wrong or inaccurate diagnosis codes for some Medicare payments. The lawsuit further alleges they violated the federal False Claims Act by submitting inaccurate codes that inflated the "risk scores" of patients on the Medicare Advantage program and enabled Sutter to reap greater reimbursements than entitled from the Centers for Medicare and Medicaid Services, which oversees the Medicare program.

When the Palo Alto Medical Foundation became aware of these inaccurate diagnosis codes, the lawsuit also alleges they failed to identify and delete additional potentially inaccurate codes that would result in a higher payment to Sutter.


“Federal healthcare programs rely on the accuracy of information submitted by healthcare providers to ensure that patients are afforded the appropriate level of care and that managed care plans receive appropriate compensation,” Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division said in a statement. “Today’s action sends a clear message that we will seek to hold healthcare providers responsible if they fail to ensure that the information they submit is truthful.”


In an emailed statement, a spokesperson for Sutter Health alluded to previous Medicare Advantage fraud cases and said the health system intends to "vigorously defend ourselves" against the allegations.

“Sutter Health and PAMF are aware of the matter and take the issues raised in the complaint seriously," the statement read. "The lawsuit involves an area of law that is currently unsettled and the subject of ongoing litigation in multiple jurisdictions."

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Topics: Medical Coding, HCC Coding, Medical Coding Audits, Risk Adjustment