Hot Topic: Fraud in Medicare Advantage Plans

Whistleblower cases in at least four states accuse dozens of privately-run Medicare Advantage plans of defrauding Medicare by overstating the medical needs of elderly patients and then not providing follow-up medical care.

Medicare Advantage plans are run by private insurance companies as an alternative to Medicare.  While Medicare pays doctors on a fee-for-service basis, Medicare Advantage plans receive a monthly capitation payment, which is a set fee each month for each patient.  The capitation payment is based on an assessment of patient risk.  

Patients who are in good health receive a lower risk score, which results in a lower monthly payment to the private insurance company, than patients with existing medical conditions or health risks.

The problem arises because privately-run Medicare Advantage plans retain consultants to conduct home health evaluations that assess patient risks.  Medicare relies on these evaluations to set the monthly capitation payment to the private insurance companies.

The whistleblower lawsuits claim that the consulting firms conducted false health assessments that overstated how ill patients were, which in turn inflated Medicare payments to the privately-run Medicare Advantage plans.

One whistleblower lawsuit in Texas was brought by a former employee of a consulting firm that conducts home health assessments for Medicare Advantage plans.  The whistleblower claims that the company sent doctors to patients’ homes to gather information, but the doctors did not conduct any physical exams and no lab tests were performed.  The doctors simply filled out “evaluation forms” that were nothing more than self-reporting by the patients, the lawsuit claims.

The lawsuit also claims that some of the doctors were not licensed, and that some of the evaluations were intentionally falsified. 

The whistleblower claims that she was fired after she objected to the way assessments were being done.  She alleges that her manager told her that the company could no longer trust her. 

Medicare Advantage plans are very popular and cover almost 17 million people.  A Center for Public Integrity investigation concluded that, between 2008 and 2013, Medicare overpaid $70 billion to Medicare Advantage plans based on overbilling, including overbilling caused by exaggerated patient risk scores.

In addition to the amount of money involved, some question whether the use of consultants to assess patients risks is doing anything to improve medical care for patients.  The Centers for Medicare and Medicaid Services (CMS) has expressed concern that the primary objectives of home evaluation visits is to create inflated risk scores and increase revenues without actually providing any follow up care or treatment to the patients.

If you have evidence of overbilling to Medicare or Medicaid, then you should consult with an experienced whistleblower attorney.  You may be entitled to a substantial reward and legal protections as a whistleblower.

John Howley, Esq.
(212) 601-2728