U.S. Attorney Trini E. Ross | U.S. Department of Justice
U.S. Attorney Trini E. Ross has announced that Independent Health Association and its affiliate, Independent Health Corporation, have agreed to a settlement of up to $98 million. The settlement resolves allegations that the organizations violated the False Claims Act by submitting invalid diagnosis codes to Medicare for enrollees in their Medicare Advantage Plans, increasing payments received from Medicare.
Medicare Advantage, also known as Medicare Part C, allows beneficiaries to enroll in managed care insurance plans. These plans receive payments adjusted based on demographic information and diagnoses of each beneficiary, commonly referred to as "risk scores." A higher risk score typically results in larger payments.
Independent Health operates these plans for beneficiaries in western New York. The United States alleges that Independent Health created DxID LLC to retrospectively search medical records and query physicians for additional diagnoses supporting higher risk scores. From 2011 through at least 2017, it is alleged that Independent Health knowingly submitted unsupported diagnoses to inflate Medicare payments.
"To protect the integrity of Medicare and other federal health care programs, my office is committed to ensuring that each and every dollar meant for Medicare beneficiaries is spent appropriately and in accordance with the law," said U.S. Attorney Trini E. Ross.
Deputy Assistant Attorney General Michael Granston emphasized the importance of accurate information from participants in Medicare Advantage: "Today’s result sends a clear message...that the United States will take appropriate action against those who knowingly submit inflated claims."
Christian J. Schrank from HHS-OIG stated: "Medicare Advantage Plans that attempt to game federal programs for profit must be held accountable through rigorous oversight and enforcement."
The settlement includes guaranteed payments of $34.5 million and contingent payments up to $63.5 million on behalf of Independent Health and DxID, which ceased operations in 2021. Betsy Gaffney will separately pay $2 million.
As part of the settlement, Independent Health entered into a five-year corporate integrity agreement with HHS-OIG requiring annual reviews by an independent organization.
The civil settlement resolves claims brought under the qui tam provisions of the False Claims Act by Teresa Ross, who will receive at least $8,212,500 from this settlement.
Assistant U.S. Attorney David Coriell along with investigator Peggy McFarland handled this matter with assistance from HHS-OIG Buffalo Regional Office staff.
The case was filed as United States ex rel. Ross v. Independent Health Association et al., No. 12-CV-0299(S) (WDNY). It should be noted that these are allegations only; there has been no determination of liability.
