DOJ Settles $62M Medicare Advantage Fraud Case

The U.S. Department of Justice (DOJ) has settled a False Claims Act (FCA) lawsuit against a California-based healthcare provider and a radiology group for submitting false diagnosis codes to receive inflated payments from the Medicare Advantage program. The settlement, involving payments totaling over $62 million, highlights the government's ongoing efforts to combat healthcare fraud, particularly targeting issues related to diagnosis coding.

Medicare Advantage allows seniors to receive Medicare benefits through private healthcare plans, with CMS adjusting payments based on the reported health status of enrollees. The settled case involves alleged actions by Seoul Medical Group (SMG) and its subsidiary to report inaccurate diagnosis codes for severe conditions that patients did not have, generating higher payments from CMS.

The allegations were brought to light by AMM's former CFO, who filed a qui tam lawsuit in 2020. The DOJ intervened, leading to the settlement and underscoring the significance of compliance with FCA regulations amongst healthcare providers participating in federal programs. The settlement amount reflects the seriousness of the violations and the government's commitment to ensuring integrity in healthcare billing practices.

Key lessons from this case stress the importance of proper compliance with federal healthcare regulations, especially in areas like Medicare Advantage where diagnosis coding directly impacts reimbursement rates and resources available for patient care.