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Feds file claim against Independent Health for violating False Claim Act

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Independent Health, which is located in Buffalo, is accused of violating the False Claim Act.

BUFFALO, N.Y. — The United States has filed a complaint against Independent Health under the False Claims Act for allegedly submitting inaccurate information about health statuses of patients enrolled in the Medicare Advantage Plans to increase the insurer's reimbursement.

Independent Health is located in Buffalo, NY.

"The Medicare Advantage Program relies on accurate information about the health status of enrollees to ensure that they receive appropriate treatment and that participating health plans receive proper compensation for the services they actually provide," said Deputy Assistant Attorney General Michael D. Granston of the Justice Department's Civil Division. "The department will continue to hold accountable health plans or providers that report unsupported diagnoses to inflate risk adjustment payments."

"The defendants are alleged to have submitted unsupported diagnosis codes to inflate reimbursements, which enabled them to receive payments from Medicare that were greater than they were entitled," said U.S. Attorney James P. Kennedy Jr. for the Western District of New York. "Defrauding taxpayer funded health care programs such as Medicare hurts not only taxpayers but our nation's entire healthcare system."

According to a release put out by the US Attorney's office: "The United States alleges that DxID coded conditions that were not documented in the patient's medical record during a visit or encounter. The government further alleges that DxID also asked health care providers to sign addenda forms up to a year after a visit or an encounter and subsequently used the addenda as substantiation for adding risk-adjusting diagnoses that were not documented during the patient encounter, in violation of Medicare requirements. DxID operated on a contingency fee of up to 20% of the additional recovery that the MA Plans received based on diagnoses captured by DxID.

The complaint alleges that these unsupported diagnoses inflated the risk scores of beneficiaries, resulting in inflated payments to Independent Health and other MA Plans. The lawsuit further alleges that once Independent Health became aware of these unsupported diagnosis codes, it failed to take corrective action to identify and delete the unsupported codes."

The lawsuit was filed under the qui tam, or whistleblower, section of the False Claims Act, which allows private parties to sue on behalf of the government.

Independent Health released the following statement in response to today's announcement:

"This civil lawsuit, initially brought in 2012 by a former employee of a company in Seattle, Washington for whom DxID provided risk adjustment consulting services, essentially disagreed with DxID's methods of verifying diagnoses in a patient's medical record.  After a lengthy investigation, the US Department of Justice had filed a notice of non-intervention. It wasn't until after Independent Health and DxID filed a motion to dismiss in 2019 that the government filed a motion to intervene, which the court recently granted.

"Independent Health and DxID deny all allegations of wrongdoing in this lawsuit. We will continue defending ourselves vigorously in Court as we believe the coding policies being challenged here were lawful and proper and all parties were paid appropriately.  Independent Health and DxID diligently navigate complex and vague coding criteria to ensure that all diagnosis and billing codes properly reflect our Members' medical conditions and are supported with documentation in the members' medical records. 

"Independent Health has been a leader and highly rated Medicare Advantage Plan for many years.  We consistently receive high ratings in member/customer service and have been a 4.5 STAR rated Medicare plan by CMS for years.  Top to bottom, from a Board that expects compliant behavior and that we always do what is right for our members and our community, to a compliance department that maintains a strong and independent role, to a disciplined internal audit team composed of experienced professionals and Board accountability, we take this position of trust with the Members we serve with utmost seriousness."

2 On Your Side reached out to Independent Health who provided the following statement:

"This civil lawsuit, initially brought in 2012 by a former employee of a company in Seattle, Washington for whom DxID provided risk adjustment consulting services, essentially disagreed with DxID's methods of verifying diagnoses in a patient's medical record.  After a lengthy investigation, the US Department of Justice had filed a notice of non-intervention. It wasn't until after Independent Health and DxID filed a motion to dismiss in 2019 that the government filed a motion to intervene, which the court recently granted.

"Independent Health and DxID deny all allegations of wrongdoing in this lawsuit. We will continue defending ourselves vigorously in Court as we believe the coding policies being challenged here were lawful and proper and all parties were paid appropriately.  Independent Health and DxID diligently navigate complex and vague coding criteria to ensure that all diagnosis and billing codes properly reflect our Members' medical conditions and are supported with documentation in the members' medical records. 

"Independent Health has been a leader and highly rated Medicare Advantage Plan for many years.  We consistently receive high ratings in member/customer service and have been a 4.5 STAR rated Medicare plan by CMS for years.  Top to bottom, from a Board that expects compliant behavior and that we always do what is right for our members and our community, to a compliance department that maintains a strong and independent role, to a disciplined internal audit team composed of experienced professionals and Board accountability, we take this position of trust with the Members we serve with utmost seriousness."

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