by North Forty News Staff | NorthFortyNews.com
$556M federal agreement includes Colorado-based operations
Affiliates of Kaiser Permanente have agreed to pay $556 million to resolve federal allegations that improper diagnosis codes were submitted for Medicare Advantage enrollees, including activity involving Colorado operations, according to the U.S. Department of Justice.
Federal prosecutors allege that, from 2009 to 2018, Kaiser affiliates improperly increased Medicare Advantage payments by adding or altering diagnosis codes after patient visits—codes that were not considered or addressed during the face-to-face care required under program rules. The settlement resolves claims brought under the False Claims Act and does not include a determination of liability.
The agreement covers multiple Kaiser entities nationwide, including Kaiser Foundation Health Plan of Colorado and Colorado Permanente Medical Group. Under Medicare Advantage (Medicare Part C), private insurers receive monthly payments from the Centers for Medicare & Medicaid Services that are adjusted based on patient risk factors. Those adjustments depend on diagnosis codes supported by the medical record and tied to care provided during the visit.
According to the United States, Kaiser pressured physicians to add diagnoses to patient records through post-visit “addenda,” sometimes months or more than a year after the appointment. In many cases, prosecutors allege, the added diagnoses were unrelated to the visit. The government further alleges that Kaiser set aggressive diagnosis targets and linked physician and facility incentives to meeting those goals, despite internal warnings and compliance concerns.
U.S. Attorney Peter McNeilly for the District of Colorado said the resolution sends a clear message that healthcare plans will be held accountable if they submit false information to increase Medicare payments. Federal officials emphasized that protecting Medicare’s integrity is critical for beneficiaries and taxpayers alike.
The settlement also resolves whistleblower lawsuits brought by former Kaiser employees Ronda Osinek and Dr. James M. Taylor under the False Claims Act’s qui tam provisions. The relators will receive $95 million from the recovery.
Federal authorities encourage anyone with information about potential healthcare fraud to report it to the U.S. Department of Health and Human Services Office of Inspector General at https://www.oig.hhs.gov/fraud/report-fraud/ or by calling 800-HHS-TIPS (800-447-8477).
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Attribution: U.S. Department of Justice
