(CN) — A federal judge allowed some claims that the largest non-profit healthcare defrauded Medicare by encouraging physicians to exaggerate patient conditions in order to goose reimbursements, but the majority of the claims were denied.
U.S. District Court Judge Edward Chen said that plaintiffs plausibly alleged that Kaiser Permanente knew through the audit process that doctors were improperly diagnosing certain conditions but let the errors persist for financial gain.
“Kaiser knew there were high error rates in risk adjustment claims in certain areas but failed to take action to find the false claims retroactively – and thus improperly retained the government’s overpayment for those false claims,” Chen wrote in the decision.
Some of the claims were dismissed because they were germane only to California and did not require the jurisdiction of the federal courts.
“Defendants contend that just because the Osinek Complaint gave California examples does not mean that the pleading is limited in scope to California,” Chen wrote. “But there must be some indication in the pleading that the problem extends outside of California.”
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