PHILADELPHIA, PA — Independence Blue Cross agreed to pay $22.5 million to resolve federal allegations that the Pennsylvania insurer submitted and failed to withdraw inaccurate diagnosis codes that increased Medicare payments for its Medicare Advantage enrollees, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced.
The civil settlement resolves False Claims Act allegations involving Medicare Advantage risk-adjustment payments from 2017 through 2021. The claims are allegations only, and there has been no determination of liability.
Medicare pays private Medicare Advantage insurers fixed monthly amounts that are adjusted based on factors including beneficiaries’ health conditions. Insurers generally receive higher payments for patients expected to incur greater health care costs.
Federal prosecutors alleged Independence Blue Cross submitted inaccurate patient diagnosis data to the Centers for Medicare & Medicaid Services to increase those risk-adjustment payments, failed to withdraw unsupported diagnoses and repay Medicare, and certified that its data was accurate.
The government’s allegations center on a chart-review program in which Independence Blue Cross nurses examined medical records and identified conditions supported by those records.
According to the government, the insurer used those reviews to submit additional diagnosis codes that generated additional Medicare payments. The same reviews also failed to substantiate some diagnoses Independence Blue Cross had previously reported to CMS, prosecutors alleged.
The government contends Independence Blue Cross did not delete those unsupported codes, which would have required it to reimburse CMS for resulting overpayments.
“The Medicare Advantage program depends on accurate data about patient health,” U.S. Attorney David Metcalf said. “When insurers inflate their profits and the government’s costs by submitting or failing to correct unsupported diagnoses, my office will continue to hold them accountable.”
The settlement resolves a whistleblower lawsuit filed under the False Claims Act by a former Independence Blue Cross employee. The law allows private parties to bring cases on the government’s behalf and receive a portion of any recovery.
The former employee will receive $3.825 million from the settlement. The case is United States ex rel. Crawford v. Independence Blue Cross, No. 20-cv-5818, in the U.S. District Court for the Eastern District of Pennsylvania.
The matter was handled by Assistant U.S. Attorney Peter Carr, litigative consultant Lauren M. Cordrey and Civil Fraud Section attorney Wendy Zupac, with support from the U.S. Department of Health and Human Services Office of Inspector General.
Potential health care fraud, waste, abuse and mismanagement can be reported to HHS at https://oig.hhs.gov/fraud/report-fraud/ or 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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