DOJ goes after Kaiser Permanente over upcoding claims

The Department of Justice announced last week that it would be intervening on behalf of six False Claims Act lawsuits filed against Kaiser Permanente. The lawsuits allege that Kaiser and its affiliates submitted inaccurate diagnostic codes in order to reap greater reimbursements from Medicare Advantage enrollees.

“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division. “Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”

Related: Report: Overbilling and upcoding by hospitals cost Medicare $1 billion

Since 2013, six whistleblower lawsuits have been filed alleging that doctors in the Kaiser Permanente network were pressured into submitting diagnostic codes for more severe or additional diagnoses than patients actually had, which would increase their CMS risk score and result in higher reimbursements–as much as $3,000 per patient, by one estimate. These changes were made months or years after the initial patient visit, the lawsuits allege.

“We are confident that Kaiser Permanente is compliant with Medicare Advantage program requirements and we intend to strongly defend against the lawsuits alleging otherwise,” Kaiser said in a statement. “Our policies and practices represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance from CMS.”

The cases will be heard in a California federal court.

Read more: 

• Fraud, waste and abuse in health care claims: A bad situation worsened by the pandemic
• Aetna & Optum ‘dummy code’ scheme runs afoul of ERISA fiduciary duty
• Medicare and Medicaid audits and investigations: Digging into the details